724. Avoidance of agreements prohibiting deduction of tax.

Every agreement for payment of an annual payment in full without a deduction of tax required by the Tax Acts is void1, but only in so far as it prohibits the deduction2. However, this provision does not apply to wills3 or to orders of court, although it does apply to an agreement made in compliance with such an order4.

However, an agreement to pay an annuity5 of such a sum as, after deduction of income tax at the basic rate, will be equal to a stated amount, is permissible

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