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HMRC internal manual

Employment Related Securities Manual

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HM Revenue & Customs
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The remittance basis for employment-related securities - up to 5 April 2015: changes from 6 April 2013

As mentioned at ERSM160200 Finance Act 2013 made changes to the taxation rules relating to residence from 6 April 2013, removing the concept of “ordinary residence” from the Taxes Acts. For ITEPA03/S26, the condition of the employee being not ordinarily resident was replaced by the condition of meeting “the requirement of section 26A”. Guidance on this new test is in the Residence, Domicile and Remittance Basis Manual.

In addition, from 6 April 2013, the remittance basis may only be claimed by individuals not domiciled in the UK (subject to transitional arrangements - see ERSM160200). Before that date the remittance basis was available to employees who met certain conditions in respect of their employment income where they were, on the one hand not domiciled but ordinarily resident in the UK, or, on the other hand, not ordinarily resident in the UK, Those two categories have, from 6 April 2013 been replaced by those employees who are not domiciled in the UK and do not meet the requirements of section 26A and those who are not domiciled in the UK and do meet the requirements of section 26A.

The other conditions that needed to be met for those not domiciled but ordinarily resident in the UK now apply to those who are not domiciled in the UK and do not meet the requirements of section 26A.

The other conditions that needed to be met for those not ordinarily resident in the UK now apply to those who are not domiciled in the UK and do meet the requirements of section 26A.

As a shorthand in various page headings in this section of the Manual, the term “not s26A” has been used to denote employees who are not domiciled in the UK and do not meet the requirements of section 26A and “s26A” has been used to denote employees who are not domiciled in the UK and do meet the requirements of section 26A.