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Section 263ZA: Former employees: employment-related liabilities

Taxation of Chargeable Gains Act 1992 · 1992 c. 12View on legislation.gov.uk

Part VII: Other property, businesses, investments etc.

This section applies if—

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 in calculating net income in respect of liabilities related to the former employment) in calculating a former employee's net income for a tax year, and
the total amount which may be deducted exceeds the remaining total income for that year.

In this section "excess relief" means the amount of the difference between—

the total amount which may be deducted, and
the remaining total income.

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.

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

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—

any relief available under this section,
any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 1(3),
section 1K(1) (the annual exempt amount),
any relief under section 261B (deduction of trading losses), and
any relief under section 261D (relief for post-cessation expenditure).

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

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.