Inheritance Tax Act 1984 section 14

Waiver of remuneration

Section 14 deals with the inheritance tax treatment of situations where an employee waives or repays remuneration to their employer, providing that such waivers or repayments are not treated as transfers of value for inheritance tax purposes in certain circumstances.

• An employee who waives or repays remuneration that would otherwise count as employment income is not making a transfer of value for inheritance tax purposes.
• The remuneration in question must be of a type that would be taxable as earnings under income tax rules (as defined by the Income Tax (Earnings and Pensions) Act 2003).
• Where the employer could deduct the remuneration in computing profits for income tax or corporation tax, the relief only applies if the deduction is disallowed or the amount is otherwise brought into charge as a result of the waiver or repayment.
• There is no time limit on when the waiver or repayment must take place for this relief to apply.