SE40005 - Special rules for determining the year that an emolument is "for". Pre-commencement and post- cessation emoluments

Section 19(1)4A ICTA 1988

Emoluments for periods before an employment begins or after it has ceased

It is possible for an emolument to be paid after an office or employment has ended or before it began, which cannot be attributable to any year in which the office or employment was held. There are special rules dealing with such pre-commencement and post-cessation receipts. They are:

The emolument is received after the office or employment ceased to be held

If the emolument is received after the office or employment ceased to be held, it is treated as being “for” the last year of assessment in which the job was held. This means you look at the Cases of Schedule E for the last year it was held to determine whether it is a chargeable emolument. (For the year it is charged to tax see SE42200 onwards.)

The emolument is received before the office or employment is held

If the emolument is received before the office or employment is held, it is treated as being “for” the first year of assessment in which the job is held. This means you look at the Cases of Schedule E for the first year it was held to determine whether it is a chargeable emolument. (For the year it is charged to tax see SE42200 onwards).

These rules reversed the decision in Bray v Best (61TC705), but they do not apply where a job ceased before 6 April 1989. It is unlikely the rules will often apply in practice because emoluments can normally be attributed to periods in which the job is held.