Note: this guidance has effect for benefits provided from 6 April 2016 onwards. The provision of a trivial benefit to, or in respect of, a former employee is an excluded benefit if there would have been no income tax charge by virtue of sections 323A and 323B ITEPA 2003 had it been provided to, or in respect of, a current employee. Guidance on the qualifying conditions for a benefit to be classed as a trivial benefit is available at EIM21864. As explained in the guidance linked to above, where the employer is a close company and the benefit is provided to an individual who is a director or other office-holder of the company (or a member of their family or household), the total value of benefits that can be treated as exempt trivial benefits is capped at a total cost of £300 in the tax year. The £300 limit is known as the annual exempt amount. There is guidance on how this limit is applied at EIM21869 and EIM21870. This ‘close company restriction’ similarly applies to benefits provided from EFRBS where the former employer is a close company at the time the benefit is provided and the recipient of the benefit is either:
a person who was a director or other office-holder of the former employer at any time when the former employer was a close company
a member of the family or household of such a person
Where the trivial benefit is provided to a member of the family or household of a former director/office-holder of a close company, the cost of the benefit is included in the calculation of the amount allocated against the former director/office-holder’s annual exempt amount. There is an example of how this works at EIM21870.