EIM15429 | Non-approved schemes: ex-gratia (voluntary) payments: small payments

EIM15428 indicated that certain small ex-gratia lump sum payments made on retirement or death could be treated as made from an approved scheme without application to Audit and Pension Scheme Services (APSS) . In that case, they are exempt from tax.

The conditions for this treatment are that:

• no other lump sum from an approved or statutory retirement benefits scheme (see EIM15407) was payable in respect of the employment and

• the total of all lump sums from all ‘associated’ employers (see EIM15430) made in connection with the retirement or death did not exceed the following limits:

These limits should take into account the value of any gift in kind that the employer provides in addition to the lump sum payment. For example, if the employer gives its retiring employee £5,000 cash and shares worth £25,000, the arrangement should not be accepted as qualifying.