Income Tax (Earnings and Pensions) Act 2003 (c. 1)

Part 6 U.K. Employment income: income which is not earnings or share-related

Chapter 3 U.K. Payments and benefits on termination of employment etc.

Exceptions and reductions U.K.

[F1 413A Exception for payment of certain legal costs U.K.

(1) This Chapter does not apply to a payment which meets conditions A and B.

(2) Condition A is that the payment meets the whole or part of legal costs incurred by the employee exclusively in connection with the termination of the employee’s employment.

(3) Condition B is that either—

(a) the payment is made pursuant to an order of a court or tribunal, or

(b) the termination of the employee’s employment results in a [F2 settlement] agreement between the employer and the employee and —

(i) the [F2 settlement] agreement provides for the payment to be made by the employer, and

(ii) the payment is made directly to the employee’s lawyer.

(4) In this section—

• F3 ...

• “lawyer” has the same meaning as “qualified lawyer” in section 203(4) of the Employment Rights Act 1996 or article 245(4) of the Employment Rights (Northern Ireland) Order 1996;

• “legal costs” means fees payable for the services and disbursements of a lawyer.]

Textual Amendments

F1 S. 413A inserted (with effect in accordance with art. 10(4) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2011 (S.I. 2011/1037), arts. 1, 10(3)

F2 Word in s. 413A(3)(b) substituted (1.3.2013) by The Enactment of Extra-Statutory Concessions Order 2013 (S.I. 2013/234), arts. 1, 3(1)(a) (with art. 3(2))

F3 Words in s. 413A(4) omitted (1.3.2013) by virtue of The Enactment of Extra-Statutory Concessions Order 2013 (S.I. 2013/234), arts. 1, 3(1)(b) (with art. 3(2))