Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
The period of foreign employment has certain criteria that needs to be met
75% or more of the whole period of service, or
-the whole of the last 10 years service, or
-at least 50% of the whole period, including any out of the last 20 years, and the whole period of service exceeds 20 years.
You will meet this on the last criteria
at least 50% of your time was abroad and the whole period of service exceeds 20 years
I have added the appropriate copy of legislation for you from ITEPA 2003 S413
S 413 Exception in certain cases of foreign service
(1)This Chapter does not apply if the service of the employee or former employee in the employment in respect of which the payment or other benefit is received included foreign service comprising—
(a)three-quarters or more of the whole period of service ending with the date of the termination or change in question, or
(b)if the period of service ending with that date exceeded 10 years, the whole of the last 10 years, or
(c)if the period of service ending with that date exceeded 20 years, one-half or more of that period, including any 10 of the last 20 years.
(2)In subsection (1) “foreign service” means service to which subsection (3), (4) or (6) applies.
(3)This subsection applies to service in or after the tax year 2003-04 such that—
(a)the earnings from the employment were not general earnings to which section 15 or 21 applies (earnings for year when employee resident and ordinarily resident in UK), or would not have been had there been any, or
(b)a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).
(4)This subsection applies to service before the tax year 2003-04 and after the tax year 1973-74 such that—
(a)the emoluments from the employment were not chargeable under Case I of Schedule E, or would not have been so chargeable had there been any, or
(b)a deduction equal to the whole amount of the emoluments from the employment was or would have been allowable under a foreign earnings deduction provision.
(5)In subsection (4) “foreign earnings deduction provision” means—
(a)paragraph 1 of Schedule 2 to FA 1974,
(b)paragraph 1 of Schedule 7 to FA 1977, or
(c)section 192A or 193(1) of ICTA.
(6)This subsection applies to service before the tax year 1974-75 such that tax was not chargeable in respect of the emoluments of the employment—
(a)in the tax year 1956-57 or later, under Case I of Schedule E, or
(b)in earlier tax years, under Schedule E,
or it would not have been so chargeable had there been any such emoluments.
So your employer can apply S413 under that condition but due to changes in legislation from 2013 they also need to consider to see if any of the award relating to after 2013 (of which there will be a proportion) has to remin liable to tax - and if so if this falls below the £30,000 exemption - this could see you having an entire tax free lump sum.
I would advise it may be an idea for your employer to liaise with Non residency unit for clear definitions of what can and cannot be paid tax free due to the fact your last 9 years have been within the Uk and definitions of residency changed 2013.
I hope this at least points you into the factors that need to be considered - I am afraid I cannot make a full and final decision - this would need to be agreed with HMRC but it would appear that the whole payment can be of tax free IF the ampount in relation to 2013 to retirement is less than £30K
Do let me know if I can assist further