All that is required for a severance payment to be taxable is that there is a ‘connection’ between the actual, prospective or past holding of the employment and the giving of the undertaking.
 STC 644
England and Wales
Cited – Beak v Robson HL 1942
The issue was whether a payment to an employee in return for a restrictive covenant escaped tax. The obligations flowing from the contract of service and the remuneration to be received by the Respondent in respect of that service were entirely . .
Cited – RCI Europe Ltd v Kate Woods (HM Inspector of Taxes) ChD 16-Dec-2003
The company made payments to a former director in return for a severance agreement which restricted his future business activities.
Held: Despite the fact that all payments were made only after his employment had been terminated, they remained . .
Lists of cited by and citing cases may be incomplete.
Updated: 13 May 2022; Ref: scu.190494