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HMRC internal manual

Employment Income Manual

Employment income: basis of assessment for general earnings: foreign earnings taxed at time of receipt in United Kingdom: example

Section 26(2) ITEPA 2003


An employee is resident in the United Kingdom and meets the conditions of section 26A in 2014/15 . She has earnings for that year of £10,000 in respect of duties performed outside the United Kingdom. She is paid the £10,000 in New York in 2015/16. In 2016/17 she remits £5,000 of those earnings to the United Kingdom. The result is that this employee is chargeable under Section 26(2) ITEPA 2003 on £5,000 in 2016/17.

This employee is likely to be resident in the United Kingdom in the year of remittance but she is assessable on the remittance even if she is not. What matters is her residence status in the year when the money was earned (see EIM42201). She will also be assessable on any further remittances out of the £5,000 balance that remains.

Note that the employee is chargeable on any remittances to the United Kingdom even if her employment ceases in 2015/16 (see EIM42370).