(1)This section applies where—
(a)an individual gives a restrictive undertaking in connection with the individual’s current, future or past employment, and
(b)a payment is made in respect of—
(i)the giving of the undertaking, or
(ii)the total or partial fulfilment of the undertaking.
(2)It does not matter to whom the payment is made.
(3)The payment is to be treated as earnings from the employment for the tax year in which it is made.
(4)Subsection (3) does not apply if the payment constitutes earnings from the employment by virtue of any other provision.
(5)A payment made after the death of the individual who gave the undertaking is treated for the purposes of this section as having been made immediately before the death.
(6)This section applies only where—
(a)the earnings from the employment are general earnings to which any of the provisions mentioned in subsection (7) apply, or
(b)if there were general earnings from the employment they would be general earnings to which any of those provisions apply.
(7)The provisions are—
(a)section 15 (earnings of employee resident, ordinarily resident and domiciled in the UK),
(b)section 21 (earnings of employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings),
(c)section 25 (UK-based earnings of employee resident but not ordinarily resident in UK), and
(d)section 27 (UK-based earnings of employee not resident in UK).
(8)In this section “restrictive undertaking” means an undertaking which restricts the individual’s conduct or activities.
For this purpose it does not matter whether or not the undertaking is legally enforceable or is qualified.