The Sporting Testimonial Payments (Excluded Relevant Step) Regulations 2016

Explanatory note

Reproduced verbatim from the instrument as published on legislation.gov.uk (Crown Copyright, Open Government Licence v3.0). The note is prepared by the responsible government department and is not part of the instrument itself.

These Regulations disapply Chapter 2 of Part 7A of the Income Tax (Earnings and Pensions) Act 2003 (“ ITEPA 2003”) in relation to sporting testimonial payments. Part 7A provides that, where an arrangement exists for providing rewards, recognition or loans in connection with a person’s employment, the value of a payment made by a third party is treated as the person’s employment income.

The disapplication of Part 7A in relation to sporting testimonial payments ensures that such payments are only taxable under section 226E of ITEPA 2003, which treats them as earnings, subject to the limited exemption in section 306B of ITEPA 2003.

A Tax Information and Impact Note covering this instrument was published on 16th March 2016 alongside the Finance ( No. 2) Bill (now the Finance Act 2016) and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins . It remains an accurate summary of the impacts that apply to this instrument.