Corporation Tax Act 2009 section 1239

Redundancy payments and approved contractual payments

Section 1239 sets out the conditions under which redundancy payments and approved contractual termination payments made by investment companies can be treated as deductible expenses of management.

• The section applies where a company with investment business makes a statutory redundancy payment or an approved contractual termination payment to an employee
• The employee's role must relate wholly or partly to the company's investment business, and the company must already be entitled to deduct management expenses
• A redundancy payment is one payable under the statutory redundancy provisions of the Employment Rights Act 1996 (or the equivalent Northern Ireland legislation)
• An approved contractual payment is a termination payment the employer is contractually obliged to make, but only where the relevant agreement has been approved by an order under section 157 of the Employment Rights Act 1996 (or the Northern Ireland equivalent)