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HMRC internal manual

Employment Related Securities Manual

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HM Revenue & Customs
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International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: examples: example 4 - s26A employee with duties performed partly in the UK & partly overseas

In 2014/15 and 2015/16 Vivienne is resident but not domiciled in the UK, and meets the requirement of ITEPA03/S26A. She works for a UK affiliate of an overseas corporation but, during those years, spends 25% of each month on secondment abroad to the parent company. She is awarded a share option on 1 May 2014 which she exercises on the vesting date, which is 30 April 2015, realising a gain of £1,000. She claims the remittance basis of taxation under ITA07/S809B for both years.

All the conditions in ITEPA03/S41H(7) are met for 2014/15 and 2015/16.

The relevant period for the share option is from 1 May 2014 to 30 April 2015 and falls within 2014/15 and 2015/16.

As Vivienne has performed the duties of her employment partly in the UK and partly overseas during the relevant period the option gain is apportioned on a just and reasonable basis, in accordance with the split of the duties.

As a result, £750 is taxed in the UK on the arising basis in 2015/16.

The balance of £250 is treated as chargeable foreign securities income and will be taxed only if remitted to the UK.

For an explanation of the requirement of section 26A, see ERSM162677.