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Taxation re Long Service Awards

Taxation re Long Service Awards

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If a tax-free gift is given after 25 years service and this utilises the full amount available (which I understand to be £50 x 25 = £1,250) what is the value of any additional tax-free gift that can be given after 40 years ie. £50 x 40 yrs or £50 x 15 yrs (no of yrs since last gift)?

In addition, I believe that this gift cannot be given in cash but can it be in the form of vouchers?
John Cooper

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By AnonymousUser
26th Nov 2003 12:09

Must be
tangible articles or shares in the employing co, so vouchers would seem to be out.

As I understand it, at 40 years, you can still use the full 40 years for calculating the maximum value (at least there's nothing in A22 to say different), but only if there has been no similar award in the last 10 years - which shouldn't be a problem here.


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By lfidler
27th Nov 2003 10:34

Remember ITEPA has replaced ESC A22
Section 323 ITEPA has replaced ESC A22 wef 5 April 2003 and the £50 pa applies from June 2003. S/s (3) provides that the gift must be either a) tangible moveable property; or b) shares in a company which is, or belongs to the same group as the employer; or c) any other benefit EXCEPT a payment/a cash voucher/a credit-token/securities/shares not in b)/an interest in or rights over securities or shares. So high street vouchers should be OK as long as they are not directly exchangeable for cash.

You need a ten year gap, minimum, between tax-free long service awards (although the way the legislation is written it does look as though a taxed award in that ten years messes this up) and whilst it is not explicit in the section, it certainly appears that if you award at 25 years, and again at 40, you get 40 x £50 on the second occasion.

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