Section 395 [Reduction where employee has contributed]
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Amendments
Section 395 and heading substituted by Finance Act 2004 section 249(8) from 6 April 2006.
(1) This section applies in relation to a relevant benefit under an employer-financed retirement benefits scheme in the form of a lump sum where, under the scheme, an employee has paid any sum or sums by way of contribution to the provision of the lump sum.
(2) The amount which, by virtue of section 394, counts as employment income, or is chargeable to tax under [subsection(2) of that section]1, is the amount of the lump sum reduced by the sum, or the aggregate of the sums, paid by the employee by way of contribution to the provision of the lump sum.
Amendments
1 Substituted for the words “Case VI of Schedule D” by Income Tax (Trading and Other Income) Act 2005 section 882(1) and Schedule 1 para 596 from 6 April 2006.
(3) A reduction under this section may not be claimed in respect of the same contribution in relation to more than one lump sum.
(4) It is to be assumed, unless the contrary is shown, that no reduction is applicable under this section.
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