Separate taxable and non-taxable components
Loss-of-office compensation and restrictive-covenant payments are capital and non-taxable. Past-service gratuities, ex-gratia, inducement payments and notice pay are taxable. Death gratuities, injury or disability payments and workmen compensation are listed as non-taxable. Outplacement support has specified conditions, including no alternative compensation if declined. Employers should document the reason, basis and taxable breakdown for affected staff rather than treating a whole package uniformly.
Use year-specific forms and fund rules
For YA 2026 IR8A, the source directs taxable gratuity or notice pay and non-taxable loss-of-office compensation to item d3, while earlier non-AIS forms used d4. IR21 has separate taxable and compensation fields and may require contract and termination evidence. Approved retirement-fund amounts accrued through 31 December 1992 may be exempt when paid at statutory retirement, but premature receipt is not eligible. The page explains approved-fund applications and methods for calculating the historic exempt amount.
Official source
A concise, independent Apex Gateway guide based on the official English source, not a reproduction of the complete document. Consult the original for full conditions, exceptions and subsequent updates.
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