777 Charge to income tax in respect of certain relevant benefits provided for employees

Summary

This section imposes a general charge to tax on an employee in respect of the payment by the employer, pursuant to any retirement benefit scheme, to the benefit of the employee. Exceptions from this general charge are provided for in section 778.

Details

(1) & (5) Where an employer pays a sum to provide retirement benefits for an employee (including a director), or the spouse, widow, widower, surviving civil partner, children, dependants or personal representative, or children of the surviving civil partner of an employee, that sum is to be treated as income of the employee assessable under Schedule E, if it is not otherwise chargeable to income tax.

(2) Where arrangements for the provision of retirement benefits are in force for the benefit of an employee, but the employer does not, or does not fully, secure the provision of the benefits by actual expenditure on premiums, a sum, equal to the amount which it would cost a third party to provide the benefits, is deemed to be income of the employee and is assessable on the employee under Schedule E.

(3) The cost of providing the benefits as referred to above may be estimated either as an annual sum for each year in which the arrangements for the provision of retirement benefits are in force or as a single sum payable in the year in which the right to the benefits arises.

(4) A sum payable by an employer in respect of a number of employees is to be duly apportioned among the employees.

Relevant Date: Finance Act 2021