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HMRC internal manual

Employment Income Manual

Employment income provided through third parties: remittance basis: A is not ordinarily UK resident - tax years 2012-13 and earlier

Sections 554Z10 and 554Z17(3) ITEPA 2003

Section 554Z10 links the Part 7A rules in with the remittance basis in cases in which A is not ordinarily UK resident. It is similar to Section 26 ITEPA 2003 (general earnings: remittance basis applies and employee not ordinarily UK resident). See EIM40301.

Section 554Z10 does not apply to steps within Section 554Z18 or 554Z19.

On Sections 554Z18 and 554Z19 (undertakings given by employers etc in relation to retirement benefits etc: earmarking etc and provision of security), see EIM45150 and EIM45155 respectively.

This page tells you about Section 554Z10 as it applies for 2012-13 and earlier tax years. For later tax years, see EIM45810.

Conditions

Four conditions need to be met. These conditions are bulleted below.

  • The value of the relevant step, or a part of it, is ‘for’ a tax year (‘the relevant tax year’) as determined under Section 554Z4 see EIM45720.
  • This value is not in respect of duties performed in the United Kingdom.
  • Section 809B, 809D or 809E ITA 2007 (remittance basis) applies to A for that tax year, see RDRM30000 onwards.
  • A is not ordinarily UK resident in that tax year.

‘Taxable specific income’

If these four conditions are met, A’s employment income under the Part 7A rules (see EIM45705), or the relevant part of it, is ‘taxable specific income’ in a tax year so far as it is remitted to the United Kingdom in that year.

‘Remitted to the United Kingdom’ has a wide meaning. Money and property can be ‘remitted’ to the United Kingdom without being physically brought into this country. See RDRM33020.

Such ‘taxable specific income’ is included in A’s ‘foreign specific employment income’ for the relevant tax year under Section 809Z7(4A) and (4B) ITA 2007. On ‘foreign specific employment income’, see RDRM31120.

If any income is remitted before A’s employment with B starts, you treat it as being remitted in the tax year in which the employment starts.

Duties performed in the United Kingdom

You determine on a just and reasonable basis how far the value of the relevant step, or any part of it, is not in respect of duties performed in the United Kingdom.