Finance Act, 1990

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Amendment of Schedule 3 (reliefs in respect of tax charged on payments on retirement, etc.) to Income Tax Act, 1967 .

12.—Schedule 3 to the Income Tax Act, 1967 , is hereby amended, as on and from the 20th day of April, 1990—

(a) by the substitution of the following subparagraph for subparagraph (c) of paragraph 4:

“(c) there shall be deducted from the product at (b) an amount equal to the relevant capital sum in relation to the office or employment.”,

and

(b) by the substitution of the following paragraph for paragraph 6:

“6. (a) In this Schedule ‘the relevant capital sum in relation to an office or employment’ means the aggregate of—

(i) the amount of any lump sum (not chargeable to tax) received, and

(ii) the amount equal to the value, at the relevant date, of any lump sum (not chargeable to tax) receivable, and

(iii) the amount equal to the value, at the relevant date, of any lump sum (not chargeable to tax) which, upon the exercise of an option or a right to commute, in whole or in part, a pension in favour of a lump sum, may be received in the future,

by the holder in respect of the office or employment in pursuance of any such scheme or fund as is referred to in section 115 (1) (d):

Provided that the relevant capital sum in relation to an office or employment shall include the amount mentioned in clause (iii) irrespective of whether or not the option or right referred to in that clause is exercised:

Provided also that, where, under the conditions or terms of any such scheme or fund as is referred to in section 115 (1) (d), the holder of the office or employment is entitled to surrender irrevocably the option or right referred to in clause (iii) and has done so at the relevant date, the relevant capital sum in relation to an office or employment shall not include the amount mentioned in that clause.

(b) In computing the charge to tax in respect of a payment chargeable to tax under section 114 in the case of a claimant, if the claimant has not previously made a claim under section 115 and the relevant capital sum (if any) in relation to the office or employment in respect of which the payment is made does not exceed £4,000, section 115 (3) and paragraph 3 shall apply to that payment as if each reference to £6,000 were a reference to £6,000 increased by the amount by which £4,000 exceeds that relevant capital sum.”.