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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
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Social security benefits: taxable foreign benefits

Part 10 Chapters 6 and 7 ITEPA 2003

A taxable foreign benefit is any benefit that is payable under the law of a country or territory outside the United Kingdom that is:

  • substantially similar in character to a benefit listed in Section 660 Table A ITEPA 2003 (see EIM76101) and
  • payable to a person resident in the UK.

Any foreign social security benefit that is also a pension is not a taxable foreign benefit for the purposes of Part 10 ITEPA 2003 and must be considered as a foreign pension under Part 9 Chapter 4 ITEPA 2003 (see EIM74500).

Amount chargeable

The amount of a taxable foreign benefit that is taxable as social security income is the amount on which tax would be chargeable if the benefit was chargeable as relevant foreign income (see section 830 IT (TOI)A 2005). The general rule is that the income tax chargeable is to be computed on the full amount of the income arising in the year of assessment whether the income has been or will be received in the UK or not (see IM1655). But there are occasions where the general rule may not apply. In particular, if:

  • the person liable claims to be not domiciled in the UK see IM1635 and EIM42806, or
  • the person liable claims relief for unremittable overseas income (see Part 8 Chapter 4 IT(TOI)A 2005 – previously section 584 ICTA 1988) or on delayed remittances (see Part 8 Chapter 2, sections 835-837 IT(TOI)A 2005 – previously section 585 ICTA 1988).

Person liable for tax

The person liable for any tax charged on a taxable foreign benefit is the person receiving or entitled to the benefit.

Taxable and other foreign benefits: exemptions

There is no liability to income tax in respect of that part of a taxable foreign benefit that corresponds with that part of a UK benefit that is exempt income; for example dependency additions (see EIM76102).

There is no liability to income tax in respect of the full amount of any other foreign benefit that is not a taxable foreign benefit if it is substantially similar in character to a UK social security benefit listed in Section 677 Table B ITEPA 2003 (see EIM76100).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)