Colquhoun v HMRC- entitlement to tax-free element of payment on termination of employment remained despite earlier payment

A lump sum payment for a change to contractual redundancy terms is not a payment in respect of termination of employment: in this case, the employee's entitlement to claim that it could be used as part of the tax free first £30,000 of a subsequent redundancy payment remained in place to be used 9 years later.

editor's subsequent note: HMRC appealed and won - see HMRC v Colquhoun [2010] UKUT 431 (TCC), 11th October 2010.

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