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HMRC internal manual

Employment Related Securities Manual

HM Revenue & Customs
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Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: non-domiciled/not s26A employees with associated employments - detail

The basic rule is that for a tax year to which ITEPA03/S41C(3) & (4) apply any securities income will be treated as FSI and will therefore be taxable only on remittance to the UK. ITEPA03/S41D, where it applies, modifies this basic rule.

It does this by taking the amount of FSI determined under section 41C, and subjecting this to a just and reasonable test. The factors to be taken into account in applying this test are as follows:

  • the employment income for the period from all the employments mentioned in section 41D(1)(a) (this means the employment to which section 41C(4) applies, and any associated employments),
  • the proportion of that income that is general earnings to which ITEPA03/S22 applies (chargeable overseas earnings),
  • the nature of and time devoted to the duties performed outside the UK, and those performed in the UK, in the period, and
  • all other relevant circumstances

Only the amount of securities income which it is just and reasonable to regard as foreign, having applied this wide-ranging test, is then treated as FSI.