Income Tax (Earnings and Pensions) Act 2003 section 312I

Interpretation of Chapter 10A

Section 312I provides definitions and interpretive rules for the key terms used throughout Chapter 10A, which deals with qualifying bonus payments.

• A "company" and a "group" take their meanings from capital gains tax legislation, with necessary adjustments for companies incorporated outside the UK.
• A "trade" must be conducted on a commercial basis and with a view to making profits — hobby or non-commercial activities do not qualify.
• The timing of a payment is determined by when it would be treated as received under the general earnings rules, even though it is a qualifying bonus payment.
• Where an employee has died, payments made to their personal representatives within 12 months of the date of death can still benefit from the exemption.