TUPE, loss of benefit, compensation and tax
Does anyone have expereince of going through a TUPE regulated transfer which resulted in reduced terms and conditions (specifically pension which is not protected by TUPE) and with an accompanying compensation payment under the terms of a compromise agreement?
My question relates to the tax status of compensation payments, if compensation is paid for loss of future access to pension system is this payment taxable? I would be grateful to hear form anyone who has experience of this situation and what the result was.
Compensation for loss of none pension benefits (e.g. share schemes, performance related bonus payments) appears straight forward; it is taxable as the payment of such benefits would have been taxable. However compensation for loss of pension appears to be a very unclear area.
There is a body of opinion which looks upon such compensation in a similar way to redundency where there is a tax free element followed by graduated payments. Accountants I have spoken to are very unclear about this, so I am looking for the results of recent claims / case history. The advice from HMRC varies from day to day depending on who answers the phone (that's if they even bother to answer!).
Does this ring any bells with anyone ?
This is a UK based quesiton ...
Last edited by avturboy; 28th Jun 2012 at 18:00.