An employee or office-holder may incur employment-related liabilities after his or her employment has ceased. Alternatively, such expenses may be paid on the employee’s behalf by the former employer, which count as retirement benefits or post-employment earnings. In either case, the former employee (or office-holder) may be able to claim a deduction from his net income for the tax year in which the payment is made (ITEPA 2003, s. 555). There is no carry forward or carry back. However, any unrelieved payment can be set against capital gains arising in the same tax year in which the payment is made (TCGA 1992, s. 263ZA).

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