Taxes Consolidation Act 1997 section 480

Relief for certain sums chargeable under Schedule E

Section 480 provides income tax relief for certain lump sum payments, known as disturbance money, made to compensate employees for changes in their work arrangements.

• Disturbance money is a lump sum paid to a full-time employee to compensate for a future pay cut arising from a business reorganisation, a change in work conditions, or a change in work location.
• The relief is not available for termination payments taxable under section 123, nor for proprietary directors or employees who own or control more than 15% of the company's ordinary share capital, part-time directors, or part-time employees.
• The relief works by recalculating tax for the year: the employee pays tax on income excluding the lump sum at normal rates, plus tax on the full lump sum at a special rate derived from including only one-third of the lump sum in total income.
• The relief is given by way of repayment of tax, and is not available where the claimant is entitled to pass the tax liability on to another person.