Part 8Former employees: deductions for liabilities

Deductions F1in calculating net income

Annotations:
Amendments (Textual)
F1

Words in s. 555 cross-heading substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 440(5) (with Sch. 2)

557Deductible payments wholly or partly borne by the former employer etc.

1

This section applies if—

a

a deductible payment is made by the former employee (and not by the former employer on behalf of the former employee), but

b

the whole or a part of the cost of making the payment is borne—

i

by the former employer, or

ii

out of the proceeds of a contract of insurance.

2

No deduction of the amount of the cost borne as mentioned in subsection (1)(b) (the “relevant amount”) may be made under section 555.

3

But this is subject to subsection (4) if the whole or a part of the relevant amount is treated—

a

as a relevant retirement benefit of the former employee, or

b

as post-employment earnings of the former employee.

4

In such a case, a deduction of so much of the relevant amount as is treated in that way may be made under section 555.