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Where Taxpayers and Advisers Meet

Redundancy Payout - Split payout over 2 years possible?

kiteboywales
Posts: 1
Joined: Mon Mar 25, 2019 11:02 am

Redundancy Payout - Split payout over 2 years possible?

Postby kiteboywales » Mon Mar 25, 2019 11:12 am

Hi all

Coming here for my partner who is practically being forced out of a company she has been with for 20 years (not just her others people too) - shed ideally like to stay but they are just screwing and screwing with things like increasing working hours, less holidays, more travel, changing T&Cs and changing salaries etc -they have been awful now for years - with assessments centers every few years type thing and managers who just want to make a name for themselves and move on in a few months

Its just an awful place to work

Anyway she is stressed out big time and I honestly think that stress will kill her if she doesn't get out - so Im supporting of her leaving and getting a simple job

The package she has been offered is circa 40K - we are just wondering would it be possible to split that over two financial years say

ie if she leaves in the next few days can she take 30K tax free in this fy and then the other 10K at the start of april???

Would that be possible???

Thanks all

darthblingbling
Posts: 226
Joined: Wed Aug 02, 2017 9:09 pm

Re: Redundancy Payout - Split payout over 2 years possible?

Postby darthblingbling » Tue Mar 26, 2019 8:07 am

You can, but the 30k exemption only applies to the first 30k of ex gratia payments. Assuming the full 40k is ex gratia the first 30k will be tax free and the other 10k will be taxed.

If it keeps her out of the higher rate bracket the exercise may be worth it.

darthblingbling
Posts: 226
Joined: Wed Aug 02, 2017 9:09 pm

Re: Redundancy Payout - Split payout over 2 years possible?

Postby darthblingbling » Tue Mar 26, 2019 8:11 am

She would obviously need to discuss with her employer as the tax point is the earlier of when she receives the money or when she was legally entitled to receive the money. So it would need to form part of the settlement agreement


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