Section 514 — Income Tax (Earnings and Pensions) Act 2003: Capital receipts: PAYE deductions to be made by trustees

Capital receipts: PAYE deductions to be made by trustees 514 1 This section applies if—

a the trustees receive a sum of money which constitutes (or forms part of) a capital receipt which, by virtue of the SIP code, counts as employment income of a participant when it is received by the participant, and b either condition A or B is met.

2 Condition A is that an officer of Revenue and Customs —

a is of the opinion that it is impracticable for the employer company (within the meaning of section 513) to make a PAYE deduction, and b accordingly directs that this section is to apply.

3 Condition B is that there is no company that qualifies as the employer company (within the meaning of that section).

4 If this section applies, the trustees must, when paying the capital receipt over to the participant, make a PAYE deduction in respect of the taxable equivalent as if the participant were a former employee of the trustees.

5 The “ taxable equivalent ” means an amount equal to the amount which counts as employment income as mentioned in subsection (1)(a).

6 If this section applies, section 689 (employee of non-UK employer) does not apply.