Section 809L ITA 2007 (inserted by Finance Act 2008)Section 809L provides that general earnings are treated as remitted to the United Kingdom at the time when :
- money or property is brought to, received, used or enjoyed in the United Kingdom, or
- services are provided in the United Kingdom
in any manner or form.
Paid in the United KingdomEarnings are remitted to the United Kingdom if they are paid to the employee in cash in this country or if the employee’s bank account here is credited with them. Employees may arrange to have earnings paid into offshore bank accounts to avoid this rule. Money that is transmitted from the employer’s bank in the United Kingdom to the employee’s offshore bank is not treated as remitted here. It has been in the banking system all of the time; the employee did not have access to it.
Loan arrangementsThe definition or remitted earnings is wide enough to cover most ways of bringing money into the country. For example, in Harmel v Wright (49TC149) an employee received earnings abroad and used them to buy shares in a company, which lent the money to a second company, which lent the money to the employee in London. It was held that the earnings had been remitted to the United Kingdom.
AssetsIf an employee receives earnings abroad which are used to purchase assets such as a car or a painting and the employee then brings the assets into the United Kingdom the earnings used to purchase the assets are regarded as remitted to the United Kingdom.
Investments abroadThe treatment of investments made abroad depends on the particular facts. In general, money invested abroad by an employee resident here should not be regarded as remitted to the United Kingdom. However, if the investment is subsequently sold in this country, or sold abroad and the proceeds brought into the United Kingdom, the amount originally invested should then be regarded as remitted here.
Payment of a debtIf the employee is ordinarily resident, earnings that are applied to the payment of “UK-linked” debts may in certain circumstances be regarded as remitted to the United Kingdom. See
EIM40303for more information.
Benefits in kindSee
EIM40303 for more information.