An employment contract can be terminated for a variety of reasons. If an employment is terminated with a payment to an employee for a breach of their rights or entitlements, then such a payment may be exempt from income tax, pursuant to s192A TCA 1997. To avail of this exemption it is important that any settlement agreement adequately reflects this relief. This article examines recent Tax Appeals Commission (TAC) decisions on termination agreements and elicits some of the relevant principles derived from them.
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