Redundancy or retirement?
My client is an employee of a large public sector organisation. He has started to draw his final salary pension as he has reached the required years of service but has been kept on as an employee and is still paid a salary as well.
Now the organisation has decided to offer him voluntary redundancy with a payment of £150 000. If he takes it it is unlikely that he will work again. My question is whether this will qualify for the £30 000 ‘golden handshake’ exemption.
I recall hearing some years ago that ‘redundancy at the time of retirement’ would be regarded by HMRC as effectively a lump sum from an unfunded retirement benefit scheme and therefore taxable in full. Is that correct or is it arguable?
If arguable what factors should be taken into account in reaching a decision? And if...
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