SE13700 - Termination payments and benefits: Section 148 ICTA 1988: 'foreign service': reduction of charge
Paragraphs 9 & 11 Schedule 11 ICTA 1988 (Section 188(6) & Paragraph 1 Schedule 11 ICTA 1988, as enacted before FA 1998, for payments and benefits received before 6 April 1998)
SE13690 explained that if an employee whose service includes
'foreign service' fails to satisfy the conditions for
full exemption, the employee might still qualify
for a
reduction in the Section 148 ICTA 1988 charge.
If service before 6 April 1974 is involved, see
SE13705.
The £30,000 exemption must be deducted
before calculating the reduction (see example
SE13980). The result
– for this purpose - is called the 'amount charged to tax'.
It is this 'amount charged to tax' which is reduced if the
qualifying conditions are met.
The amount of the reduction is:
| 'amount charged to tax' x | length of 'foreign service' |
| length of total service before the 'relevant date' |
See example
SE13985. The meaning of
'relevant date' is the same as in SE13680.
Note that:
- the taxpayer can claim the 'foreign service' reduction by notice in writing to the Inspector at any time up to five years after 31 January following the end of the relevant year of assessment
- the amount of the reduction may need to be restricted so that any charges on income are retained
