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ITEPA 2003, ss 401–416 (Pt 6, Ch 3) deals with payments and benefits on termination of employment. For a payment or benefit to fall within that Chapter, it must be received directly or indirectly in consideration or in consequence of, or otherwise in connection with:

1. Ìý

   (a)ÌýÌýÌýÌý the termination of a person's employment

2. Ìý

   (b)ÌýÌýÌýÌý a change in the duties of a person's employment, or

3. Ìý

   (c)ÌýÌýÌýÌý a change in the earnings from a person's employment

by the person or the person's spouse or civil partner, blood relative, dependant or personal representatives. However, a payment or benefit is not a termination payment or benefit within ITEPA 2003, s 401 if it is otherwise chargeable to tax (ITEPA 2003, s 401(3)). Consequently, it is necessary to consider whether a payment is chargeable to income tax under any other provisions of ITEPA 2003 before considering ITEPA 2003, ss 401–416.

The logical approach when considering the tax status of payments and benefits provided in connection with the termination of employment is to analyse each payment and