SE15122 - Non-approved retirement benefits schemes: receipts excluded from charge

Section 596A(8) ICTA 1988

A lump sum receipt or non-cash benefit from an unapproved retirement benefits scheme (other than a pension) which is otherwise chargeable under Section 596A ICTA 1988 (see SE15100 and SE15120) may nevertheless be excluded from charge if attributable to:

• previous employer contributions on which the employee has been assessed under Section 595(1) ICTA 1988 (see SE15040 and example SE15428) or
• the employee's own contributions to the scheme (see SE15090 and example SE15428) or
• a lump sum that can be “approved” under Statement of Practice 13/91: see SE15170
• death or disablement by accident (see SE15020 last paragraph)

Notes:

• Section 596A(15) ICTA 1988 places the onus on the person receiving a lump sum to show that the amount paid is attributable to contributions which have been assessed under Section 595(1) ICTA 1988
• FA 1994 introduced important exceptions to this rule to deter avoidance of tax: see SE15060.
• attributing lump sums from the scheme to contributions is a matter of fact. This should be done on any reasonable basis and excessive time should not be spent on this (see example SE15428).