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Income Tax (Earnings and Pensions) Act 2003

▸ Part 1 – Overview
  • Section 1 – Overview of contents of this Act
  • Section 2 – Abbreviations and defined expressions
▸ Part 2 – Employment income: charge to tax
  • ▸ Chapter 1 – Introduction
    • Section 3 – Structure of employment income Parts
    • Section 4 – “Employment” for the purposes of the employment income Parts
    • Section 5 – Application to offices and office-holders
  • ▸ Chapter 2 – Tax on employment income
    • Section 6 – Nature of charge to tax on employment income
    • Section 7 – Meaning of “employment income”, “general earnings” and “specific employment income”
    • Section 8 – Meaning of “exempt income”
  • ▸ Chapter 3 – Operation of tax charge
    • Section 9 – Amount of employment income charged to tax
    • Section 10 – Meaning of “taxable earnings” and “taxable specific income”
    • Section 11 – Calculation of “net taxable earnings”
    • Section 12 – Calculation of “net taxable specific income”
    • Section 13 – Person liable for tax
  • ▸ Chapter 4 – Taxable earnings: UK resident employees
    • Taxable earnings
    • UK resident employees
    • Year for which general earnings are earned
    • When general earnings are received
  • ▸ Chapter 5B – Taxable specific income from employment-related securities etc: internationally mobile employees
    • Section 41F – Taxable specific income: internationally mobile employees etc.
    • Section 41G – Section 41F: the relevant period
    • Section 41H – Section 41F: chargeable and unchargeable foreign securities income
    • Section 41I – Limit on “chargeable foreign securities income” where duties of associated employment performed in UK
    • Section 41J – Location of employment duties
    • Section 41K – Securities income from overseas Crown employment
    • Section 41L – Chargeable and unchargeable foreign securities income: just and reasonable apportionment
  • ▸ Chapter 5A – Taxable Specific Income: Effect of Remittance Basis
    • Section 41A – Taxable specific income from employment-related securities: effect of remittance basis
    • Section 41B – Section 41A: the relevant period
    • Section 41C – Section 41A: foreign securities income
    • Section 41D – Limit on foreign securities income where duties of associated employment performed in UK
    • Section 41E – Foreign securities income: just and reasonable apportionment
  • ▸ Chapter 6 – Disputes as to domicile or ordinary residence
    • Section 42 – Commissioners to determine dispute as to domicile or ordinary residence
    • Section 43 – Appeal against Commissioners' decision on domicile or ordinary residence
  • ▸ Chapter 7 – Application of provisions to agency workers
    • Agency workers
    • Anti-avoidance
    • Supplementary
  • ▸ Chapter 8 – Application of provisions to workers under arrangements made by intermediaries
    • Application of this Chapter
    • The deemed employment payment
    • Supplementary provisions
    • When a person qualifies as small for a tax year
    • When a person has a UK connection
    • Interpretation
  • ▸ Chapter 9 – Managed service companies
    • Application of this Chapter
    • The deemed employment payment
    • Supplementary provisions
  • ▸ Chapter 10 – Workers’ services provided to public sector through intermediaries (61K-61X)
    • Section 61K – Scope of this Chapter
    • Section 61L – Meaning of “public authority”
    • Section 61M – Engagements to which Chapter applies
    • Section 61N – Worker treated as receiving earnings from employment
    • Section 61O – Conditions where intermediary is a company
    • Section 61P – Conditions where intermediary is a partnership
    • Section 61Q – Calculation of deemed direct payment
    • Section 61R – Application of Income Tax Acts in relation to deemed employment
    • Section 61S – Deductions from chain payments
    • Section 61T – Client-led status disagreement process
    • Section 61U – Information to be provided by worker or intermediary and consequences of failure
    • Section 61V – Consequences of providing fraudulent information
    • Section 61W – Prevention of double charge to tax and allowance of certain deductions
    • Section 61X – Interpretation
    • Section 61TA – Duty for client to withdraw status determination statement if it ceases to be medium or large
    • Section 61WA – Anti-avoidance
    • Section 61NA – Meaning of status determination statement
  • ▸ Chapter 5 – Taxable earnings: remittance basis rules and rules for non-uk resident employees
    • Taxable earnings
    • Remittance basis rules for employees outside section 26
    • Remittance basis rules: employees who met section 26A requirement
    • Employees not resident in the UK
    • Special class of earnings for purposes of sections 25 to 27
    • Year of which general earnings are earned
    • Relief for delayed remittances
    • Place of performance of duties of employment
    • Apportionment of earnings
  • ▸ Chapter 5C – Relief for new residents on foreign employment income
    • Foreign employment election
    • Key definitions
    • Claim for relief
    • Qualifying foreign employment income
    • Other rules for determining amounts of qualifying foreign employment income
▸ Part 3 – Employment income: earnings and benefits etc. treated as earnings
  • ▸ Chapter 1 – Earnings
    • Section 62 – Earnings
  • ▸ Chapter 2 – Taxable benefits: the benefits code
    • Section 63 – The benefits code
    • Section 64 – Relationship between earnings and benefits code
    • Section 65 – Dispensations relating to benefits within provisions not applicable to lower-paid employment
    • Section 66 – Meaning of “employment” and related expressions
    • Section 67 – Meaning of “director” and “full-time working director”
    • Section 68 – Meaning of “material interest” in a company
    • Section 69 – Extended meaning of “control”
    • Section 69A – Optional remuneration arrangement
    • Section 69B – Optional remuneration arrangements: supplementary
  • ▸ Chapter 3 – Taxable benefits: expenses payments
    • Section 70 – Sums in respect of expenses
    • Section 71 – Meaning of paid or put at disposal by reason of the employment
    • Section 72 – Sums in respect of expenses treated as earnings
  • ▸ Chapter 4 – Taxable benefits: vouchers and credit-tokens
    • Cash vouchers: introduction
    • Meaning of “cash voucher”
    • Cash vouchers: exceptions
    • Benefit of cash voucher treated as earnings
    • Non-cash vouchers: introduction
    • Meaning of “non-cash voucher”
    • Non-cash voucher: exceptions
    • Benefit of non-cash voucher treated as earnings
    • Credit-tokens: introduction
    • Meaning of “credit-token”
    • Credit-tokens: exception
    • Benefit of credit-token treated as earnings
    • General supplementary provisions
  • ▸ Chapter 5 – Taxable benefits: living accommodation
    • Living accommodation
    • Exceptions
    • Benefit of living accommodation treated as earnings
    • Calculation of cash equivalent
    • Accommodation costing £75,000 or less
    • Accommodation costing more than £75,000
    • Apportionment of cash equivalent
    • Other tax implications
    • Supplementary
  • ▸ Chapter 6 – Taxable benefits: cars, vans and related benefits
    • General
    • Cars: benefit treated as earnings
    • Cars: the price of a car
    • Cars: treatment of accessories
    • Cars: capital contributions by employee
    • Cars: the appropriate percentage
    • Cars: appropriate percentage: first registered on or after 1st January 1998
    • Cars: appropriate percentage: first registered before 1st January 1998
    • Cars: unavailability or payments for private use
    • Cars: special cases
    • Cars: reduction where shared car
    • Car fuel: benefit treated as earnings
    • Vans: benefit treated as earnings
    • Vans: reductions of cash equivalent
    • Reduction of cash equivalent where van is shared
    • Reduction for payments for private use
    • Modification of provisions where van temporarily replaced
    • Van fuel: benefit treated as earnings
    • Cars and vans: exceptions
    • Orders
    • Supplementary
  • ▸ Chapter 7 – Taxable benefits: loans
    • Introduction
    • Benefit of taxable cheap loan treated as earnings
    • Calculation of amount of interest at official rate
    • Supplementary provisions relating to taxable cheap loans
    • Loan released or written off
    • General supplementary provisions
  • ▸ Chapter 8 – Taxable benefits: notional loans in respect of acquisitions of shares
    • Introduction
    • Acquisition of shares for less than market value
    • Supplementary provisions
  • ▸ Chapter 9 – Taxable benefits: disposals of shares for more than market value
    • Section 198 – Shares to which this Chapter applies
    • Section 199 – Disposal for more than market value: amount treated as earnings
    • Section 200 – Minor definitions
  • ▸ Chapter 10 – Taxable benefits: residual liability to charge
    • Introduction
    • Cash equivalent of benefit treated as earnings
    • Determination of the cost of the benefit
    • Supplementary provisions
    • Special rules for scholarships
  • ▸ Chapter 11 – Taxable benefits: exclusion of lower-paid employments from parts of benefits code
    • Introduction
    • What is lower-paid employment
    • Treatment of related employments
  • ▸ Chapter 12 – Payments treated as earnings
    • Payments
    • Shares of employee shareholders
    • Sporting testimonial payments
▸ Part 4 – Employment income: exemptions
  • ▸ Chapter 1 – Exemptions: general
    • Section 227 – Scope of Part 4
    • Section 228 – Effect of exemptions on liability under provisions outside Part 2
    • Section 228A – General exclusion from exemptions: optional remuneration arrangements
  • ▸ Chapter 2 – Exemptions: mileage allowances and passenger payments
    • Mileage allowances
    • Passenger payments
    • Supplementary
  • ▸ Chapter 3 – Exemptions: other transport, travel and subsistence
    • Section 237 – Parking provision and expenses
    • Section 238 – Modest private use of heavy goods vehicles
    • Section 239 – Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles
    • Section 240 – Incidental overnight expenses and benefits
    • Section 241 – Incidental overnight expenses and benefits: overall exemption limit
    • Section 242 – Works transport services
    • Section 243 – Support for public bus services
    • Section 244 – Cycles and cyclist’s safety equipment
    • Section 245 – Travelling and subsistence during public transport strikes
    • Section 246 – Transport between work and home for disabled employees: general
    • Section 247 – Provision of cars for disabled employees
    • Section 248 – Transport home: late night working and failure of car-sharing arrangements
    • Section 248A – Emergency vehicles
    • Section 249 – Interpretation of this Chapter
    • Section 237A – Vehicle-battery charging
    • Section 241A – Travel by unpaid directors of not-for-profit companies
    • Section 241B – Travel where directorship held as part of trade or profession
  • ▸ Chapter 4 – Exemptions: education and training
    • Work-related training
    • Persons leaving local authority care
    • Individual learning account training
  • ▸ Chapter 5 – Exemptions: recreational benefits
    • Recreational facilities
    • Annual parties and functions
    • Entertainment
  • ▸ Chapter 6 – Exemptions: non-cash vouchers and credit-tokens
    • General exemptions: use for exempt benefits
    • Exemptions for particular non-cash vouchers and credit-tokens
  • ▸ Chapter 7 – Exemptions: removal benefits and expenses
    • Exemption of removal benefits and expenses: general
    • Benefits and expenses within this Chapter
    • Limit on exemption
    • Special exemption and relief for bridging loans
  • ▸ Chapter 7A – Exemptions: Amounts which would otherwise be deductible
    • Section 289A – Exemption for paid or reimbursed expenses
    • Section 289B – Approval to pay or reimburse expenses at a flat rate
    • Section 289C – Revocation of approvals
    • Section 289D – Exemption for other benefits
    • Section 289E – Anti-avoidance
  • ▸ Chapter 8 – Exemptions: special kinds of employees
    • Ministers of religion
    • MPs, government ministers etc.
    • Members of local authorities etc
    • Armed forces
    • Crown employees
    • Voluntary office-holders
    • Consuls, foreign agents etc.
    • Visiting forces and staff of designated allied headquarters
    • Detached national experts
    • Offshore oil and gas workers
    • Miners etc.
    • Carers
    • Professional sportspersons
  • ▸ Chapter 9 – Exemptions: pension provision
    • Section 307 – Death or retirement benefit provision
    • Section 308 – Exemption of contributions to approved personal pension arrangements
    • Section 308A – Exemption of contributions to overseas pension scheme
    • Section 308B – Independent advice in respect of conversions and transfers of pension scheme benefits
    • Section 308C – Provision of pensions advice: limited exemption
  • ▸ Chapter 10 – Exemptions: termination of employment
    • Redundancy payments
    • Outplacement benefits
  • ▸ Chapter 10A – Exemptions: bonus payments by certain employers
    • Section 312A – Limited exemption for qualifying bonus payments
    • Section 312B – “Qualifying bonus payments”
    • Section 312C – Section 312B: the participation and equality requirements
    • Section 312D – Section 312B: the trading requirement
    • Section 312E – Section 312B: the indirect employee-ownership requirement
    • Section 312F – Section 312B: the office-holder requirement
    • Section 312G – “Service company”
    • Section 312H – Excluded payments
    • Section 312I – Interpretation of Chapter 10A
  • ▸ Chapter 11 – Miscellaneous exemptions
    • Living accommodation
    • Work accommodation, supplies etc.
    • Workplace meals
    • Childcare
    • Telephones and computer equipment
    • Eye tests and special corrective appliances
    • Health-screening and medical check-ups
    • Recommended medical treatment
    • Awards and gifts
    • Overseas medical treatment
    • Expenses incidental to sale etc. of asset
    • Monitoring schemes
    • Employee shareholder agreements
▸ Part 5 – Employment income: deductions allowed from earnings
  • ▸ Chapter 1 – Deductions allowed from earnings: general rules
    • Introduction
    • General rules
  • ▸ Chapter 2 – Deductions for employee’s expenses
    • Introduction
    • General rule for deduction of employee’s expenses
    • Travel expenses
    • Fees and subscriptions
    • Employee liabilities and indemnity insurance
    • Expenses of ministers of religion
    • Agency fees paid by entertainers
    • Special rules for earnings with a foreign element
    • Disallowance of business entertainment and gifts expenses
    • Other rules preventing deductions of particular kinds
  • ▸ Chapter 3 – Deductions from benefits code earnings
    • Introduction
    • Deductions where amounts treated as earnings under the benefits code
  • ▸ Chapter 4 – Fixed allowances for employee’s expenses
    • Introduction
    • Fixed sum deductions
  • ▸ Chapter 5 – Deductions for earnings representing benefits or reimbursed expenses
    • Introduction
    • Travel costs and expenses where duties performed abroad
    • Travel costs and expenses of non-resident or qualifying new resident employees where duties performed in UK
    • Foreign accommodation and subsistence costs and expenses
    • Personal security assets and services
  • ▸ Chapter 6 – Deductions from seafarers' earnings
    • Section 378 – Deduction from seafarers’ earnings: eligibility
    • Section 379 – Calculating the deduction
    • Section 380 – Limit on deduction where UK duties etc. make amount unreasonable
    • Section 381 – Taking account of other deductions
    • Section 382 – Duties on board ship
    • Section 383 – Place of performance of incidental duties
    • Section 384 – Meaning of employment “as a seafarer”
    • Section 385 – Meaning of “ship”
▸ Part 6 – Employment income: income which is not earnings or share-related
  • ▸ Chapter 1 – Payments to non-approved pension schemes
    • Section 386 – Charge on payments to non-approved retirement benefits schemes
    • Section 387 – Meaning of “non-approved retirement benefits scheme”
    • Section 388 – Apportionment of payments in respect of more than one employee
    • Section 389 – Exception: employment where earnings not within main charging provisions
    • Section 390 – Exception: non-domiciled employees with foreign employers
    • Section 391 – Exception: seafarers with overseas earnings
    • Section 392 – Relief where no benefits are paid or payable
  • ▸ Chapter 2 – Benefits from employer-financed retirement benefits schemes
    • Benefits treated as employment income
    • Valuation of benefits etc.
    • Interpretation
  • ▸ Chapter 3 – Payments and benefits on termination of employment etc.
    • Preliminary
    • Payments and benefits treated as employment income
    • Exceptions and reductions
    • General and supplementary provisions
▸ Part 7 – Employment income: income and exemptions relating to securities
  • ▸ Chapter 1 – Introduction
    • General
    • Interpretation of Chapters 1 to 5
    • Application of Chapters 2 to 4A
    • Information
  • ▸ Chapter 2 – Conditional interests in shares
    • Introduction
    • Tax exemption on acquisition
    • Tax charge on post-acquisition chargeable events
  • ▸ Chapter 3 – Convertible securities
    • Introduction
    • Tax relief on acquisition
    • Tax charge on post-acquisition chargeable events
    • Supplementary
  • ▸ Chapter 3A – Securities with artificially depressed market value
    • Introduction
    • Tax charge on acquisition
    • Other tax charges
    • Supplementary
  • ▸ Chapter 3B – Securities with artificially enhanced market value
    • Introduction
    • Charge on non-commercial increases
    • Supplementary
  • ▸ Chapter 3C – Securities acquired for less than market value
    • Section 446Q – Application of this Chapter
    • Section 446R – Case outside this Chapter
    • Section 446S – Notional loan
    • Section 446T – Amount of notional loan
    • Section 446U – Discharge of notional loan
    • Section 446UA – Pre-acquisition avoidance cases
    • Section 446V – Chapter to be additional to other income tax charges
    • Section 446W – Definitions
  • ▸ Chapter 3D – Securities disposed of for more than market value
    • Section 446X – Application of this Chapter
    • Section 446Y – Amount treated as income
    • Section 446Z – Definitions
  • ▸ Chapter 4 – Post-acquisition benefits from securities
    • Section 447 – Charge on other chargeable benefits from securities
    • Section 450 – Definitions
    • Section 449 – Case outside this Chapter
    • Section 448 – Amount of charge
    • Tax charge where restrictions or rights varied
    • Tax charge on other benefits from shares
    • Supplementary provisions
    • Interpretation
    • Tax charge on increase in value of shares of dependent subsidiaries
  • ▸ Chapter 4A – Shares in research institution spin-out companies
    • Introduction
    • Tax relief on acquisition
    • Tax relief following acquisition
    • Disapplication of Chapters 2 and 3B
    • Supplementary
  • ▸ Chapter 5 – Securities options
    • Introduction
    • Tax relief on acquisition of option
    • Tax charge on post-acquisition chargeable events
    • Supplementary provisions
    • Supplementary provisions
  • ▸ Chapter 6 – Approved share incentive plans
    • Introduction
    • Scope of tax advantages
    • Tax advantages connected with award of shares
    • Tax advantages connected with holding of shares
    • Tax advantages connected with shares ceasing to be subject to plan
    • Tax advantages: supplementary
    • Scope of tax charges
    • Charges connected with holding of shares
    • Charges connected with shares ceasing to be subject to plan
    • PAYE
    • Other tax consequences
  • ▸ Chapter 7 – Approved SAYE option schemes
    • Section 517 – Share options to which this Chapter applies
    • Introduction
    • Tax advantages
  • ▸ Chapter 8 – Approved CSOP schemes
    • Introduction
    • Tax advantages
    • Tax charge
  • ▸ Chapter 9 – Enterprise management incentives
    • Introduction
    • Tax advantages: receipt of option
    • Tax advantages: exercise of option
    • Tax advantages where disqualifying events
    • Tax advantages: taxable benefits
    • Other income tax consequences
  • ▸ Chapter 10 – Priority share allocations
    • Exemption where offer made to both public and employees
    • Exemption where different offers made to public and employees
    • Supplementary provisions
  • ▸ Chapter 11 – Supplementary provisions about employee benefit trusts
    • Introduction
    • Employee benefit trusts
    • Attribution of interests in company
▸ Part 7A – Employment income provided through third parties
  • ▸ Chapter 1 – Application etc
    • Application: main case
    • Application: close companies
    • Relevant steps
    • Exclusions
    • Interpretation
  • ▸ Chapter 2 – Treatment of relevant step for income tax purposes
    • Employment income
    • Remittance basis
    • Double taxation: earlier income tax liability
    • Supplementary
  • ▸ Chapter 3 – Undertakings given by employers etc. in relation to retirement benefits etc
    • Section 554Z16 – Application etc.
    • Section 554Z17 – Employer etc. to be treated as relevant third person etc.
    • Section 554Z18 – Earmarking etc.
    • Section 554Z19 – Provision of security
    • Section 554Z20 – Valuation of step within section 554Z19
    • Section 554Z21 – Relief for earmarking or security not followed by contribution or relevant benefit
▸ Part 8 – Former employees: deductions for liabilities
  • ▸ Deductions in calculating net income
    • Section 555 – Former employee entitled to deduction in calculating net income
    • Section 556 – Deductible payments made outside the time limits allowed
    • Section 556A – Deductible payments made pursuant to tax avoidance arrangements
    • Section 557 – Deductible payments wholly or partly borne by the former employer etc.
  • ▸ Interpretation
    • Section 558 – Meaning of “deductible payment”
    • Section 559 – Liabilities related to the former employment
    • Section 560 – Meaning of “qualifying insurance contract”
    • Section 561 – Connected contracts
    • Section 562 – Meaning of “former employee” and “employment”
    • Section 563 – Other interpretation
    • Section 564 – Application of this Part to office-holders
▸ Part 9 – Pension income
  • ▸ Chapter 1 – Introduction
    • Section 565 – Structure of Part 9
  • ▸ Chapter 2 – Tax on pension income
    • Section 566 – Nature of charge to tax on pension income and relevant definitions
    • Section 567 – Amount charged to tax
    • Section 567A – Cases in which Part 7A has applied to source of pension income
    • Section 568 – Person liable for tax
  • ▸ Chapter 3 – United Kingdom pensions: general rules
    • Section 569 – United Kingdom pensions
    • Section 570 – “Pension”: interpretation
    • Section 571 – Taxable pension income
    • Section 572 – Person liable for tax
    • Section 572A – Temporary non-residents
  • ▸ Chapter 4 – Foreign pensions: general rules
    • Section 573 – Foreign pensions
    • Section 574 – “Pension”: interpretation
    • Section 575 – Taxable pension income
    • Section 576 – Person liable for tax
    • Section 576A – Temporary non-residents
    • Section 574A – “Pension”: relevant lump sums
  • ▸ Chapter 5 – United Kingdom social security pensions
    • Section 577 – United Kingdom social security pensions
    • Section 578 – Taxable pension income
    • Section 579 – Person liable for tax
  • ▸ Chapter 5A – Pensions under registered pension schemes
    • Section 579A – Pensions
    • Section 579B – Taxable pension income
    • Section 579C – Person liable for tax
    • Section 579CA – Temporary non-residents
    • Section 579D – Interpretation
    • Section 579CZA – Exemption for beneficiaries’ income withdrawal in some cases
  • ▸ Chapter 6 – Approved retirement benefits schemes
    • Pensions and annuities
    • Unauthorised payments
    • Interpretation etc.
  • ▸ Chapter 7 – Former approved superannuation funds
    • Annuities
    • Unauthorised payments
    • Interpretation
  • ▸ Chapter 8 – Approved personal pension schemes
    • Annuities
    • Income withdrawals
    • Unauthorised personal pension payments
    • Interpretation
  • ▸ Chapter 9 – Retirement annuity contracts
    • Section 605 – Annuities
    • Section 606 – Meaning of “retirement annuity contract”
    • Section 607 – Taxable pension income
    • Section 608 – Person liable for tax
  • ▸ Chapter 10 – Other employment-related annuities
    • Section 609 – Annuities for the benefit of dependants
    • Section 610 – Annuities under non-registered occupational pension schemes
    • Section 611 – Annuities in recognition of another’s services
    • Section 612 – Taxable pension income: UK annuities
    • Section 613 – Taxable pension income: foreign annuities
    • Section 614 – Person liable for tax
    • Section 611A – Exemptions from sections 609 to 611
  • ▸ Chapter 11 – Certain overseas government pensions paid in the UK
    • Section 615 – Certain overseas government pensions paid in the United Kingdom
    • Section 616 – Taxable pension income
    • Section 617 – Deduction allowed from taxable pension income
    • Section 618 – Person liable for tax
  • ▸ Chapter 12 – House of Commons Members' Fund
    • Section 619 – The House of Commons Members’ Fund
    • Section 620 – Meaning of “House of Commons Members’ Fund”
    • Section 621 – Taxable pension income
    • Section 622 – Person liable for tax
  • ▸ Chapter 13 – Return of surplus employee additional voluntary contributions
    • Section 623 – Return of surplus employee additional voluntary contributions
    • Section 624 – Taxable pension income
    • Section 625 – Person liable for tax
    • Section 626 – Income tax treated as paid
    • Section 627 – Meaning of “grossing up”
    • Section 628 – Interpretation
  • ▸ Chapter 14 – Pre-1973 pensions paid under the Overseas Pensions Act 1973
    • Section 629 – Pre-1973 pensions paid under the Overseas Pensions Act 1973
    • Section 630 – Interpretation
    • Section 631 – Taxable pension income
    • Section 632 – Person liable for tax
  • ▸ Chapter 15 – Voluntary annual payments
    • Section 633 – Voluntary annual payments
    • Section 634 – Taxable pension income: UK voluntary annual payments
    • Section 635 – Taxable pension income: foreign voluntary annual payments
    • Section 636 – Person liable for tax
  • ▸ Chapter 15A – Lump sums under registered pension schemes
    • Introduction
    • Tax treatment of authorised lump sums
    • Tax treatment of authorised lump sum death benefits
    • Allowances
  • ▸ Chapter 16 – Exemption for certain lump sums
    • ...
  • ▸ Chapter 17 – Exemptions: any taxpayer
    • Section 645 – Social security pensions: increases in respect of children
    • Section 642A – Netherlands Benefit Act for Victims of Persecution 1940-1945
    • Section 646F – Interpretation of sections 646B to 646E
    • Section 646E – Non-registered schemes: beneficiaries' annuities from drawdown funds
    • Section 646D – Non-registered schemes: beneficiaries' annuities from unused funds
    • Section 646C – Registered schemes: beneficiaries' annuities from drawdown funds
    • Section 646B – Registered schemes: beneficiaries' annuities from unused funds
    • Section 646A – Foreign pensions of consular employees
    • Section 646 – Former miners etc.: coal and allowances in lieu of coal
    • Section 638 – Awards for bravery
    • Section 644A – Health and employment insurance payments
    • Section 644 – Pensions payable where employment ceased due to disablement
    • Section 643 – Malawi, Trinidad and Tobago and Zambia government pensions
    • Section 642 – Compensation for National-Socialist persecution
    • Section 641 – Wounds and disability pensions
    • Section 640A – Lump sums provided under armed forces early departure scheme
    • Section 640 – Exemption under section 639 where income withheld
    • Section 639 – Pensions in respect of death due to military or war service
  • ▸ Chapter 18 – Exemptions: Non-UK resident taxpayers
    • Section 647 – Introduction and meaning of “foreign residence condition” etc.
    • Section 648 – The Central African Pension Fund
    • Section 649 – Commonwealth government pensions
    • Section 650 – Oversea Superannuation Scheme
    • Section 651 – Overseas Pensions Act 1973
    • Section 652 – Overseas Service Act 1958
    • Section 653 – Overseas Service Pensions Fund
    • Section 654 – The Pensions (India, Pakistan and Burma) Act 1955
▸ Part 10 – Social security income
  • ▸ Chapter 1 – Introduction
    • Section 655 – Structure of Part 10
  • ▸ Chapter 2 – Tax on social security income
    • Section 656 – Nature of charge to tax on social security income
    • Section 657 – Meaning of “social security income”, “taxable benefits” etc.
    • Section 658 – Amount charged to tax
    • Section 659 – Person liable for tax
  • ▸ Chapter 3 – Taxable UK social security benefits
    • Section 660 – Taxable benefits: UK benefits - Table A
    • Section 661 – Taxable social security income
    • Section 662 – Person liable for tax
  • ▸ Chapter 4 – Taxable UK social security benefits: exemptions
    • Incapacity benefit
    • Income support and relevant welfare supplementary payments
    • Jobseeker’s allowance and relevant welfare supplementary payments
    • Increases in respect of children
  • ▸ Chapter 5 – UK social security benefits wholly exempt from income tax
    • Section 677 – UK social security benefits wholly exempt from tax: Table B
  • ▸ Chapter 6 – Taxable foreign benefits
    • Section 678 – Taxable benefits: foreign benefits
    • Section 679 – Taxable social security income
    • Section 680 – Person liable for tax
  • ▸ Chapter 7 – Taxable and other foreign benefits: exemptions
    • Section 681 – Taxable and other foreign benefits: exemptions
    • Section 681A – Foreign benefits of consular employees
  • ▸ Chapter 8 – High income child benefit charge
    • Section 681B – High income child benefit charge
    • Section 681C – The amount of the charge
    • Section 681D – Extension of charge in cases where child not living with claimant
    • Section 681E – Special cases
    • Section 681F – Alteration of income limit, etc. by Treasury order
    • Section 681G – Meaning of "partner"
    • Section 681H – Other interpretation provisions
▸ Part 11 – Pay As You Earn
  • ▸ Chapter 1 – Introduction
    • Section 682 – Scope of this Part
    • Section 683 – PAYE income
  • ▸ Chapter 2 – PAYE: general
    • Section 684 – PAYE regulations
    • Section 685 – Tax tables
    • Section 686 – Meaning of “payment”
  • ▸ Chapter 3 – PAYE: special types of payer or payee
    • Section 687 – Payments by intermediary
    • Section 687A – Payment of employment income under Part 7A
    • Section 688 – Agency workers
    • Section 688A – Managed service companies: recovery from other persons
    • Section 689 – Employee of non-UK employer
    • Section 689A – Oil and gas workers on the continental shelf
    • Section 690 – Employee non-resident etc.
    • Section 691 – Mobile UK workforce
    • Section 692 – Organised arrangements for sharing tips
    • Section 688B – Travel expenses of workers providing services through intermediaries: recovery of unpaid tax
    • Section 688AA – Workers' services provided through intermediaries: recovery of PAYE
    • Section 688AB – Workers’ providing services through intermediaries etc: cases where taxes already paid
    • Section 690A – Employer notification for internationally mobile employees
    • Section 690B – Direction by HMRC in relation to internationally mobile employees
    • Section 690C – Employees who were internationally mobile etc. before 2025-26
    • Section 690D – Employer notification for qualifying new residents
    • Section 690E – Direction by HMRC in relation to qualifying new residents
  • ▸ Chapter 4 – PAYE: special types of income
    • Income provided by means of vouchers and tokens
    • Income provided in other ways
    • Supplemental
  • ▸ Chapter 5 – PAYE Settlement Agreements
    • Section 703 – Introduction
    • Section 704 – Sums payable by employers under agreements
    • Section 705 – Approximations allowed in calculations
    • Section 706 – Exclusion of general earnings from income etc.
    • Section 707 – Interpretation of this Chapter
  • ▸ Chapter 6 – Miscellaneous and Supplemental
    • Section 708 – PAYE repayments
    • Section 709 – Additional provision for certain assessments
    • Section 710 – Notional payments: accounting for tax
    • Section 711 – Right to make a return
    • Section 712 – Interpretation of this Part
    • Section 707A – Provision of additional information to His Majesty’s Revenue and Customs
▸ Part 12 – Payroll giving
  • Section 713 – Donations to charity: payroll deduction scheme
  • Section 714 – Meaning of “donations”
  • Section 715 – Approval of schemes: regulation by Treasury
▸ Part 13 – Supplementary provisions
  • ▸ Alteration of amounts
    • Section 716 – Alteration of amounts by Treasury order
  • ▸ Priority rule for certain dividends etc
    • Section 716A – Priority rule for dividends etc. of UK resident companies etc.
  • ▸ Employment intermediaries: information powers
    • Section 716B – Employment intermediaries to keep, preserve and provide information etc.
  • ▸ Orders and regulations
    • Section 717 – Orders and regulations made by Treasury or Commissioners
  • ▸ Interpretation
    • Section 718 – Connected persons
    • Section 719 – Meaning of “control”
    • Section 720 – Meaning of “an officer of Revenue and Customs” etc.
    • Section 721 – Other definitions
  • ▸ Amendments, repeals, citation etc.
    • Section 722 – Consequential amendments
    • Section 723 – Commencement and transitional provisions and savings
    • Section 724 – Repeals and revocations
    • Section 725 – Citation
▸ Schedules
  • ▸ Schedule 1 Abbreviations and defined expressions
    • Part 1 – Abbreviations of acts and instruments
    • Part 2 – Index of expressions defined in this Act or ICTA
  • ▸ Schedule 2 Share incentive plans
    • Part 1 – - Introduction (paras 1-5)
    • Part 2 – General requirements (paras 6-12)
    • Part 3 – Eligibility of individuals (paras 13-24)
    • Part 4 – Types of shares that may be awarded (paras 25-33)
    • Part 5 – Free shares (paras 34-42)
    • Part 6 – Partnership shares (paras 43-57)
    • Part 7 – Matching shares (paras 58-61)
    • Part 8 – Cash dividends and dividend shares (paras 62-69)
    • Part 9 – Trustees (paras 70-80)
    • Part 10 – Notification of plans, annual returns and enquiries (paras 81A-81K)
    • Part 11 – Supplementary provisions (paras 86-100)
    • Part 10A – Disqualifying events (para 85A)
  • ▸ Schedule 3 SAYE option schemes
    • Part 1 – Introduction (paras 1-3)
    • Part 2 – General requirements for approval (paras 4-8)
    • Part 3 – Eligibility of individuals to participate in scheme (paras 9-16)
    • Part 4 – Shares to which schemes can apply (paras 17-22)
    • Part 5 – Requirements for linked savings arrangement (paras 23-26)
    • Part 6 – Requirements etc. relating to share options (paras 27-37)
    • Part 7 – Exchange of share options (paras 38-39)
    • Part 8 – Notification of schemes, annual returns and enquiries (paras 40A-40K)
    • Part 9 – Supplementary provisions (paras 45-49)
  • ▸ Schedule 4 CSOP schemes
    • Part 1 – Introduction (paras 1-3)
    • Part 2 – General requirements (paras 4-6)
    • Part 3 – Eligibility of individuals to participate in scheme (paras 7-14)
    • Part 4 – Shares to which schemes can apply (paras 15-20)
    • Part 5 – Requirements etc. relating to share options (paras 21-25A)
    • Part 6 – Exchange of share options (paras 26-27)
    • Part 7 – Approval of schemes (paras 28A-28K)
    • Part 8 – Supplementary provisions (paras 33-37)
  • ▸ Schedule 5 Enterprise management incentives
    • Part 1 – Introduction (paras 1-2)
    • Part 2 – General requirements (paras 3-7)
    • Part 3 – Qualifying companies (paras 8-23)
    • Part 4 – Eligible employees (paras 24-33)
    • Part 5 – Requirements relating to options (paras 34-38)
    • Part 6 – Company reorganisations (paras 39-43)
    • Part 7 – Notification of option to Inland Revenue (paras 44-50]
    • Part 8 – Supplementary provisions (paras 51-59)
  • ▸ Schedule 6 Consequential amendments
    • Part 1 – Income and Corporation Taxes Act 1988 (paras 1-121)
    • Part 2 – Other enactments (paras 122-269)
  • ▸ Schedule 7 Transitionals and savings
    • Part 1 – Continuity of the law (paras 1-7)
    • Part 2 – Employment income: charge to tax (paras 8-14)
    • Part 3 – Employment income: earnings and benefits etc. treated as earnings (paras 15-32)
    • Part 4 – Employment income: exemptions (paras 33-38)
    • Part 5 – Employment income: deductions (paras 39-40)
    • Part 6 – Employment income: income which is not earnings or related to securities (paras 41-43)
    • Part 7 – Employment income: income related to securities (43A-84)
    • Part 8 – Approved profit sharing schemes (85-87)
    • Part 9 – Social security income (para 88)
    • Part 10 – PAYE (para 89)
    • Part 11 – Consequences for corporation tax (paras 90-92)
  • ▸ Schedule 8 Repeals and revocations
    • Part 1 – Acts of Parliament
    • Part 2 – Subordinate legislation
Part 7 – Employment income: income and exemptions relating to securities / Chapter 6 – Approved share incentive plans

Chapter 6 – Approved share incentive plans

Contents

  • Introduction 1 section
  • Scope of tax advantages 1 section
  • Tax advantages connected with award of shares 4 sections
  • Tax advantages connected with holding of shares 3 sections
  • Tax advantages connected with shares ceasing to be subject to plan 2 sections
  • Tax advantages: supplementary 1 section
  • Scope of tax charges 1 section
  • Charges connected with holding of shares 4 sections
  • Charges connected with shares ceasing to be subject to plan 4 sections
  • PAYE 6 sections
  • Other tax consequences 1 section

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