| Commentary

(i) Deduction from income

| Commentary

(i)     Deduction from income

This exemption, from the charge to tax under the termination provisions for costs paid by the employer, should not be confused with the quite different deduction from income which is available for the employee for costs paid by him. See ITEPA 2003 s 346 (paras [190][193]).

Example:

A lump sum of £50,000 compensation, paid in settlement of an unfair dismissal case without regard to costs, would attract tax under ITEPA 2003 s 401 on a 'slice' of £20,000. But if settlement is reached on the basis

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