SE21800 - Benefits: pension provisions

Section 155(4) ICTA 1988

No charge can arise under Section 154 ICTA 1988 in respect of the expense incurred by an employer in providing for the employee a pension or similar benefit payable on the employee's death or retirement.

The exemption applies to the provision of:

• a pension or annuity
• a lump sum
• a gratuity and
• any similar benefit.

It covers provisions made for the employee or the employee's spouse, children or dependants.

See SE21802 where the provision is financed by a company in the same group as the employer.

Note that the exemption only applies to a charge under Section 154 ICTA 1988. It does not prevent liability arising under any other provision which charges the cost of providing a pension, for example Section 648 ICTA 1988 ( SE01570).

A Schedule E charge under Section 595 ICTA 1988 can arise where an employer makes contributions to a non-approved retirement benefits scheme, see SE15010.

For provision of pensions to family members see SE21801.