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Explanatory note

Original text. Later amendments are not shown.

(This note is not part of the Regulations)

These Regulations amend the Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations 2007 (“the 2007 Regulations”), which exempt specified benefits under an employer-financed retirement benefits scheme from the charge to tax under section 394 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”).

These Regulations amend the 2007 Regulations to include an exemption for the payment of tuition fees for a member of the armed forces in respect of certain further and higher education. After the member’s death or medical discharge, an eligible member of his or her family may be entitled to the provision of the benefit and these Regulations also add an exemption to the 2007 Regulations in respect of such provision.

The Regulations also amend the 2007 Regulations to include an exemption in respect of the provision of gratuity earnings, resettlement commutation or resettlement grants to a member or former member of the armed forces. The exemption extends to where the member dies in service and a member of his or her family or the member’s personal representative is entitled to gratuity earnings.

These Regulations further amend the 2007 Regulations to include an exemption for the provision of independent inquest advice to members of the family or brothers or sisters of a member of the armed forces in connection with the death in service of that member.

Section 393B(4A) ITEPA 2003 permits regulations to be made with retrospective effect. The exemptions created by these Regulations have effect for the tax years 2009-2010 and subsequent tax years so far as they relate to tuition fees and for the tax year 2010-2011 and subsequent tax years so far as they relate to benefits in respect of gratuity earnings, resettlement commutation or resettlement grants under the Armed Forces (Redundancy, Resettlement and Gratuity Earnings Schemes) (No. 2) Order 2010 (S.I. 2010/832) and to the provision of independent inquest advice.

A Tax Information and Impact Note covering this instrument has been prepared and is available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.