Income Tax (Earnings and Pensions) Act 2003 section 271

Limited exemption of removal benefits and expenses: general

Section 271 provides a tax exemption for certain removal benefits and expenses provided to employees who need to relocate because of their job, subject to an overall monetary limit.

• Removal benefits provided to an employee and removal expenses paid or reimbursed by the employer are exempt from income tax, up to a specified limit set out in section 287.
• The exemption does not apply where the earnings in question are chargeable overseas earnings or foreign earnings taxed on the remittance basis.
• The exemption similarly does not apply to amounts treated as employment income under the disguised remuneration rules in Part 7A where the remittance basis applies to those amounts.
• The overall exemption is capped by section 287, which sets the maximum amount of removal benefits and expenses that can be received tax-free.