§ Mr. GouldTo ask the Chancellor of the Exchequer what is the current position with regard to the taxation of local authority enhancements of voluntary early retirement schemes; when the position was last changed; and if he will make a statement.
§ Mr. MaudePayments under the Local Government (Compensation for Premature Retirement) Regulations 1982 are, for tax purposes, regarded as compensation for loss of office. They qualify under the "golden handshake" rules for exemption from tax on the first £30,000. Regular payments made as additions to pensions are chargeable to income tax on the full amount. This tax treatment has not changed since the regulations were introduced. Different rules might apply to payments under other retirement arrangements.