Income Tax (Earnings and Pensions) Act 2003 section 401

Application of this Chapter

Section 401 sets out when the special tax rules for termination and change-of-employment payments and benefits apply, who can be a recipient, and how double taxation is avoided.

• The rules cover payments and benefits received directly or indirectly in connection with the termination of employment, a change in duties, or a change in earnings — whether received by the employee, their spouse or civil partner, blood relative, dependant, or personal representatives.
• If a payment or benefit is already subject to income tax under another provision, this chapter does not apply, thereby preventing a double tax charge on the same amount.
• Specific exceptions for certain types of payments and benefits are set out in sections 405 to 414A, and these override the general scope of the chapter.
• Any payment or benefit provided on behalf of, or to the order of, the employee or former employee is treated as received by that employee or former employee, and references throughout the chapter to "employee" and "employer" include former employees and former employers.