Corporation Tax Act 2009 section 78

Payments in respect of employment in more than one capacity

Section 78 deals with how to apportion redundancy and other termination payments where an employee worked partly in the employer's trade and partly in other capacities.

• Where an employee's employment spans both the employer's trade and other capacities, any redundancy or termination payment must be split between those roles
• The apportionment must be carried out on a just and reasonable basis
• The portion attributed to employment in the trade is treated as if the employee had been employed wholly in the trade
• Only the trade-apportioned portion qualifies as a deductible expense when calculating trading profits under section 77