A compensation for loss of office is a lump-sum ex gratia payment made to an employee or director when their service contract is terminated. This payment can be wholly or partly tax-free provided the employee is not entitled to the compensation under the service contract.
A golden handshake, also known as a golden good-bye, is an ex gratia payment made by an employer to an employee upon termination of employment, such as in the event of a company takeover. Certain conditions may allow such payments to be partially or fully tax-free.
