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HMRC internal manual

Employment Related Securities Manual

HM Revenue & Customs
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International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: non-resident employees and split years

ITEPA03/S41H(8) provides that, where an individual is not resident in the UK in a tax year which falls within a relevant period and the duties of the employment are carried out wholly outside the UK in that year, then any securities income accruing during that part of the relevant period is treated as unchargeable foreign securities income and so is not chargeable to tax as employment income.

It should be noted that “not resident in the United Kingdom” has the meaning attached to it for UK tax purposes; a person who is resident in the UK and at the same time treaty non-resident would not fall within section 41H(8).

Split years

For a general discussion of split year treatment, Extra Statutory Concession A11 and its replacement by legislation in Schedule 45 of Finance Act 2013, see HMRC’s Guidance Note on the Statutory Residence Test - RDR3 (website)$

Finance Act 2013 gave legislative effect to Extra-Statutory Concession A11, so that, where an individual qualifies for split-year treatment by falling within one of the Cases in Part 3 of Schedule 45, in the overseas part of that tax year, he or she is taxed as if a non-resident.