Introduction Details of the Section
3.Subsection (1) introduces amendments to Chapter 8 of Part 4 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) (exemptions: special kinds of employees)
4.Subsection (2) amends section 297A of ITEPA (exemption for Operational Allowance) so that; “by the Secretary of State” is replaced with “under a Royal Warrant made under Section 333 of the Armed Forces Act 2006”.
5.Subsection (3) amends section 297B of ITEPA (exemption for Council Tax Relief) so that; “by the Secretary of State” is replaced with “under a Royal Warrant made under Section 333 of the Armed Forces Act 2006”.
6.Subsection (4) inserts new section 297C into ITEPA.
7.New section 297C(1) makes provision for payments of the CEA to or in respect of serving or deceased members of the Armed Forces to be exempt from income tax.  New section 297C(2) specifies the legal authority under which payments of the CEA are made.
8.Subsection (5) provides that the amendments made by the section have effect in relation to payments made on or after 6 April 2012.