Taxation of Chargeable Gains Act 1992

[F1 263ZA Former employees: employment-related liabilities U.K.

(1) This section applies if—

(a) a deduction of the amount of one or more deductible payments may be made under section 555 of ITEPA 2003 (former employee entitled to deduction [F2 in calculating net income] in respect of liabilities related to the former employment) [F3 in calculating a former employee's net income] for a tax year, and

(b) the total amount which may be deducted exceeds [F4 the remaining total income] for that year.

(2) In this section “excess relief” means the amount of the difference between—

(a) the total amount which may be deducted, and

(b) [F5 the remaining total income].

[F6 (2A) In this section “the remaining total income”, in relation to a tax year, means the former employee's total income for the tax year less reliefs already deducted for the tax year at Step 2 of the calculation in section 23 of ITA 2007 for the purpose of calculating the former employee's income tax liability.]

(3) The amount of the excess relief may be treated as an allowable loss accruing to the former employee for that tax year.

This subsection applies only if the former employee makes a claim for the purpose.

(4) But no relief is available under subsection (3) in respect of any amount of the excess relief that exceeds the maximum amount.

(5) For the purposes of this section the “maximum amount”, in relation to the excess relief for a tax year, means the amount on which the former employee would be chargeable to capital gains tax for that year if the following were disregarded—

(a) any relief available under this section,

(b) any allowable losses falling to be carried forward to that year from a previous year for the purposes of [F7 section 1(3)],

(c) [F8 section 1K(1)] (the annual exempt amount),

(d) any relief [F9 under section 261B] (deduction of trading losses), and

(e) any relief [F10 under section 261D] (relief for post-cessation expenditure).

(6) A former employee may make a claim under subsection (3) and a claim under section 555(3) of ITEPA 2003 in the same notice.]

Textual Amendments

F1 S. 263ZA inserted (with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 217 (with Sch. 7)

F2 Words in s. 263ZA(1)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(2)(a) (with Sch. 2)

F3 Words in s. 263ZA(1)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(2)(b) (with Sch. 2)

F4 Words in s. 263ZA(1)(b) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(3) (with Sch. 2)

F5 Words in s. 263ZA(2)(b) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(4) (with Sch. 2)

F6 S. 263ZA(2A) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(5) (with Sch. 2)

F7 Words in s. 263ZA(5)(b) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 80(a)

F8 Words in s. 263ZA(5)(c) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 80(b)

F9 Words in s. 263ZA(5)(d) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(6)(a) (with Sch. 2)

F10 Words in s. 263ZA(5)(e) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 333(6)(b) (with Sch. 2)