|
| |
|
the expenses could be deducted in calculating the profits of the trade for |
| |
| |
(4) | Time spent travelling counts as time spent working— |
| |
(a) | if the cost of the journey could, if it were incurred by P, be deducted |
| |
in calculating P’s earnings from that employment under section 337, |
| 5 |
338, 340 or 342 of ITEPA 2003 or, as the case may be, in calculating |
| |
the profits of the trade under ITTOIA 2005, or |
| |
(b) | to the extent that P does something else during the journey that |
| |
would itself count as work in accordance with this paragraph. |
| |
(5) | Time spent undertaking training counts as time spent working if— |
| 10 |
(a) | in the case of an employment held by P, the training is provided or |
| |
paid for by the employer and is undertaken to help P in performing |
| |
duties of the employment, and |
| |
(b) | in the case of a trade carried on by P, the cost of the training could be |
| |
deducted in calculating the profits of the trade for income tax |
| 15 |
| |
(6) | Sub-paragraphs (4) and (5) have effect without prejudice to the generality of |
| |
sub-paragraphs (2) and (3). |
| |
(7) | Assume for the purposes of sub-paragraphs (2) to (5) that P is someone who |
| |
is chargeable to income tax under ITEPA 2003 or ITTOIA 2005. |
| 20 |
(8) | A voluntary post for which P has no contract of service does not count as an |
| |
employment for the purposes of this Schedule. |
| |
| |
27 (1) | Work is done where it is actually done, regardless of where the employment |
| |
is held or the trade is carried on by P. |
| 25 |
(2) | But work done by way of or in the course of travelling to or from the UK by |
| |
air or sea or via a tunnel under the sea is assumed to be done overseas even |
| |
during the part of the journey in or over the UK. |
| |
(3) | For these purposes, travelling to or from the UK is taken to— |
| |
(a) | begin when P boards the aircraft, ship or train that is bound for a |
| 30 |
destination in the UK or (as the case may be) overseas, and |
| |
(b) | end when P disembarks from that aircraft, ship or train. |
| |
(4) | This paragraph is subject to express provisions in this Schedule about the |
| |
location of work done by people with relevant jobs on board vehicles, |
| |
| 35 |
Rules for calculating the reference period |
| |
28 (1) | This paragraph applies in calculating the “reference period” (which is a step |
| |
taken in determining whether P works “sufficient hours in the UK” or |
| |
“sufficient hours overseas” as assessed over a given period of days). |
| |
(2) | The number of days in the given period may be reduced to take account of— |
| 40 |
(a) | reasonable amounts of annual leave or parenting leave taken by P |
| |
during the period (for all employments held and trades carried on by |
| |
P during the period, whether in the UK or overseas), |
| |
|
| |
|
| |
|
(b) | absences from work at times during the period when P is on sick |
| |
leave and cannot reasonably be expected to work as a result of the |
| |
illness or injury in question, and |
| |
(c) | non-working days embedded within a block of leave for which a |
| |
reduction is made under paragraph (a) or (b). |
| 5 |
(3) | But no reduction may be made in respect of any day that is a “disregarded |
| |
day” (see paragraphs 9(2) and 14(3) in Part 1 of this Schedule). |
| |
(4) | For any particular employment or trade, “reasonable” amounts of annual |
| |
leave or parenting leave are to be assessed having regard to (among other |
| |
| 10 |
(a) | the nature of the work, and |
| |
(b) | the country or countries where P is working. |
| |
(5) | Non-working days are “embedded within” a block of leave only if there are, |
| |
as part of that block of leave— |
| |
(a) | at least 3 consecutive days of leave taken before the non-working day |
| 15 |
or series of non-working days in question, and |
| |
(b) | at least 3 consecutive days of leave taken after the non-working day |
| |
or series of non-working days in question. |
| |
(6) | A “non-working day” is any day of the week, month or year on which P— |
| |
(a) | is not normally expected to work (according to P’s contract of |
| 20 |
employment or usual pattern of work), and |
| |
(b) | does not in fact work. |
| |
(7) | In calculating the reductions to be made under sub-paragraph (2)— |
| |
(a) | if it turns out, after applying sub-paragraph (3), that the reasonable |
| |
amounts of annual leave or parenting leave or, as the case may be, |
| 25 |
the absences from work on sick leave do not add up (across the |
| |
period) to a whole number of days, the number in that case is to be |
| |
rounded down to the nearest whole number, but |
| |
(b) | any such rounding is to be ignored for the purposes of sub- |
| |
| 30 |
| |
(a) | P changes employment during the given period, |
| |
(b) | there is a gap between the two employments, and |
| |
(c) | P does not work at all at any time between the two employments, |
| |
| the number of days in the given period may be reduced by the number of |
| 35 |
| |
| |
(a) | if the gap lasts for more than 15 days, only 15 days may be |
| |
| |
(b) | if there is more than one change of employment during the period, |
| 40 |
the maximum number of days that may be subtracted under sub- |
| |
paragraph (8) for all the gaps in total is 30. |
| |
Significant breaks from UK or overseas work |
| |
29 (1) | There is a “significant break from UK work” if at least 31 days go by and not |
| |
| 45 |
(a) | a day on which P does more than 3 hours’ work in the UK, or |
| |
|
| |
|
| |
|
(b) | a day on which P would have done more than 3 hours’ work in the |
| |
UK but for being on annual leave, sick leave or parenting leave. |
| |
(2) | There is a “significant break from overseas work” if at least 31 days go by |
| |
and not one of those days is— |
| |
(a) | a day on which P does more than 3 hours’ work overseas, or |
| 5 |
(b) | a day on which P would have done more than 3 hours’ work |
| |
overseas but for being on annual leave, sick leave or parenting leave. |
| |
Relevant jobs on board vehicles, aircraft or ships |
| |
30 (1) | P has a “relevant” job on board a vehicle, aircraft or ship if condition A and |
| |
| 10 |
(2) | Condition A is that P either— |
| |
(a) | holds an employment, the duties of which consist of duties to be |
| |
performed on board a vehicle, aircraft or ship while it is travelling, or |
| |
(b) | carries on a trade, the activities of which consist of work to be done |
| |
or services to be provided on board a vehicle, aircraft or ship while it |
| 15 |
| |
(3) | Condition B is that substantially all of the trips made in performing those |
| |
duties or carrying on those activities are ones that involve crossing an |
| |
international boundary at sea, in the air or on land (referred to as “cross- |
| |
| 20 |
(4) | Sub-paragraph (2)(b) is not satisfied unless, in order to do the work or |
| |
provide the services, P has to be present (in person) on board the vehicle, |
| |
aircraft or ship while it is travelling. |
| |
(5) | Duties or activities of a purely incidental nature are to be ignored in deciding |
| |
whether the duties of an employment or the activities of a trade consist of |
| 25 |
duties or activities of a kind described in sub-paragraph (2)(a) or (b). |
| |
| |
31 (1) | What counts as a “UK tie” depends on whether P was resident in the UK for |
| |
one or more of the 3 tax years preceding year X. |
| |
(2) | If P was resident in the UK for one or more of those 3 tax years, each of the |
| 30 |
following types of tie counts as a UK tie— |
| |
| |
(b) | an accommodation tie, |
| |
| |
| 35 |
| |
(3) | Otherwise, each of the following types of tie counts as a UK tie— |
| |
| |
(b) | an accommodation tie, |
| |
| 40 |
| |
(4) | In order to have the requisite number of UK ties for year X, each tie of P’s |
| |
must be of a different type. |
| |
|
| |
|
| |
|
| |
32 (1) | P has a family tie for year X if— |
| |
(a) | in year X, a relevant relationship exists at any time between P and |
| |
| |
(b) | that other person is someone who is resident in the UK for year X. |
| 5 |
(2) | A relevant relationship exists at any time between P and another person if at |
| |
| |
(a) | P and the other person are husband and wife or civil partners and, in |
| |
either case, are not separated, |
| |
(b) | P and the other person are living together as husband and wife or, if |
| 10 |
they are of the same sex, as if they were civil partners, or |
| |
(c) | the other person is a child of P’s and is under the age of 18. |
| |
(3) | P does not have a family tie for year X by virtue of sub-paragraph (2)(c) if P |
| |
sees the child in the UK on fewer than 61 days (in total) in— |
| |
| 15 |
(b) | if the child turns 18 during year X, the part of year X before the day |
| |
on which the child turns 18. |
| |
(4) | A day counts as a day on which P sees the child if P sees the child in person |
| |
for all or part of the day. |
| |
(5) | “Separated” means separated— |
| 20 |
(a) | under an order of a court of competent jurisdiction, |
| |
(b) | by deed of separation, or |
| |
(c) | in circumstances where the separation is likely to be permanent. |
| |
33 (1) | This paragraph applies in deciding for the purposes (only) of paragraph |
| |
32(1)(b) whether a person with whom P has a relevant relationship (a |
| 25 |
“family member”) is someone who is resident in the UK for year X. |
| |
(2) | A family tie based on the fact that a family member has, by the same token, |
| |
a relevant relationship with P is to be disregarded in deciding whether that |
| |
family member is someone who is resident in the UK for year X. |
| |
(3) | A family member falling within sub-paragraph (4) is to be treated as being |
| 30 |
not resident in the UK for year X if the number of days that he or she spends |
| |
in the UK in the part of year X outside term-time is less than 21. |
| |
(4) | A family member falls within this sub-paragraph if he or she— |
| |
(a) | is a child of P’s who is under the age of 18, |
| |
(b) | is in full-time education in the UK at any time in year X, and |
| 35 |
(c) | is resident in the UK for year X but would not be so resident if the |
| |
time spent in full-time education in the UK in that year were |
| |
| |
(5) | In sub-paragraph (4)— |
| |
(a) | references to full-time education in the UK are to full-time education |
| 40 |
at a university, college, school or other educational establishment in |
| |
| |
(b) | the reference to the time spent in full-time education in the UK is to |
| |
the time spent there during term-time. |
| |
|
| |
|
| |
|
(6) | For the purposes of this paragraph, half-term breaks and other breaks when |
| |
teaching is not provided during a term are considered to form part of “term- |
| |
| |
| |
34 (1) | P has an accommodation tie for year X if— |
| 5 |
(a) | P has a place to live in the UK, |
| |
(b) | that place is available to P during year X for a continuous period of |
| |
| |
(c) | P spends at least one night at that place in that year. |
| |
(2) | If there is a gap of fewer than 16 days between periods in year X when a |
| 10 |
particular place is available to P, that place is to be treated as continuing to |
| |
be available to P during the gap. |
| |
(3) | P is considered to have a “place to live” in the UK if— |
| |
(a) | P’s home or at least one of P’s homes (if P has more than one) is in |
| |
| 15 |
(b) | P has a holiday home or temporary retreat (or something similar) in |
| |
| |
(c) | accommodation is otherwise available to P where P can live when P |
| |
| |
(4) | Accommodation may be “available” to P even if P holds no estate or interest |
| 20 |
in it and even if P has no legal right to occupy it. |
| |
(5) | If the accommodation is the home of a close relative of P’s, sub-paragraph |
| |
(1)(c) has effect as if for “at least one night” there were substituted “a total of |
| |
| |
(6) | A “close relative” is— |
| 25 |
(a) | a parent or grandparent, |
| |
| |
(c) | a child aged 18 or over, or |
| |
(d) | a grandchild aged 18 or over, |
| |
| in each case, including by half-blood or by marriage or civil partnership. |
| 30 |
| |
35 (1) | P has a work tie for year X if P works in the UK for at least 40 days (whether |
| |
continuously or intermittently) in year X. |
| |
(2) | For these purposes, P works in the UK for a day if P does more than 3 hours’ |
| |
work in the UK on that day. |
| 35 |
36 (1) | This paragraph applies for the purposes of paragraph 35. |
| |
(2) | It applies in cases where P has a relevant job on board a vehicle, aircraft or |
| |
| |
(3) | When making a cross-border trip as part of that job— |
| |
(a) | if the trip begins in the UK, P is assumed to do more than 3 hours’ |
| 40 |
work in the UK on the day on which it begins, |
| |
(b) | if the trip ends in the UK, P is assumed to do fewer than 3 hours’ |
| |
work in the UK on the day on which it ends. |
| |
|
| |
|
| |
|
(4) | Those assumptions apply regardless of how late in the day the trip begins or |
| |
ends (even if it begins or ends just before midnight). |
| |
(5) | For the purposes of sub-paragraph (3)(a), it does not matter whether the trip |
| |
| |
(6) | A day that falls within both paragraph (a) and paragraph (b) of sub- |
| 5 |
paragraph (3) is to be treated as if it fell only within paragraph (a). |
| |
(7) | In the case of a cross-border trip to or from the UK that is undertaken in |
| |
| |
(a) | the day on which the trip begins or, as the case may be, ends is the |
| |
day on which the stage of the trip that involves crossing the UK |
| 10 |
border begins or ends, and |
| |
(b) | accordingly, any day on which a stage is undertaken by P solely |
| |
within the UK must (if it lasts for more than 3 hours) be counted |
| |
separately as a day on which P does more than 3 hours’ work in the |
| |
| 15 |
| |
37 | P has a 90-day tie for year X if P has spent more than 90 days in the UK in— |
| |
(a) | the tax year preceding year X, |
| |
(b) | the tax year preceding that tax year, or |
| |
(c) | each of those tax years separately. |
| 20 |
| |
38 (1) | P has a country tie for year X if the country in which P meets the midnight |
| |
test for the greatest number of days in year X is the UK. |
| |
| |
(a) | P meets the midnight test for the same number of days in year X in |
| 25 |
two or more countries, and |
| |
(b) | that number is the greatest number of days for which P meets the |
| |
midnight test in any country in year X, |
| |
| P has a country tie for year X if one of those countries is the UK. |
| |
(3) | P meets the “midnight test” in a country for a day if P is present in that |
| 30 |
country at the end of that day. |
| |
| |
| |
| |
39 | This Part of this Schedule— |
| 35 |
(a) | explains when, as respects an individual, a tax year is a split year, |
| |
(b) | defines the overseas part and the UK part of a split year, and |
| |
(c) | amends certain enactments to provide for special charging rules in |
| |
cases involving split years. |
| |
|
| |
|
| |
|
40 (1) | The effect of a tax year being a split year is to relax the effect of paragraph |
| |
2(3) (which treats individuals who are UK resident “for” a tax year as being |
| |
UK resident at all times in that year). |
| |
(2) | When and how the effect of paragraph 2(3) is relaxed is defined in the special |
| |
charging rules introduced by the amendments made by this Part. |
| 5 |
(3) | Subject to those special charging rules (and any other special charging rules |
| |
for split years that may be introduced in the future), nothing in this Part |
| |
alters an individual’s residence status for a tax year or affects his or her |
| |
| |
| 10 |
(a) | does not apply in determining the residence status of personal |
| |
| |
(b) | applies to only a limited extent in determining the residence status of |
| |
the trustees of a settlement (see section 475 of ITA 2007 and section |
| |
69 of TCGA 1992, as amended by this Part). |
| 15 |
42 | The existence of special charging rules for cases involving split years is not |
| |
intended to affect any question as to whether an individual would fall to be |
| |
regarded under double taxation arrangements as a resident of the UK. |
| |
Definition of a “split year” |
| |
43 (1) | As respects an individual, a tax year is a “split year” if— |
| 20 |
(a) | the individual is resident in the UK for that year, and |
| |
(b) | the circumstances of the case fall within— |
| |
(i) | Case 1, Case 2 or Case 3 (cases involving actual or deemed |
| |
departure from the UK), or |
| |
(ii) | Case 4, Case 5, Case 6, Case 7 or Case 8 (cases involving actual |
| 25 |
or deemed arrival in the UK). |
| |
(2) | The 8 Cases are described in paragraphs 44 to 51. |
| |
(3) | In those paragraphs, the individual is referred to as “the taxpayer” and the |
| |
tax year as “the relevant year”. |
| |
(4) | In applying Part 2 of this Schedule to those paragraphs, for “P” read “the |
| 30 |
| |
Case 1: starting full-time work overseas |
| |
44 (1) | The circumstances of a case fall within Case 1 if they are as described in sub- |
| |
| |
(2) | The taxpayer was resident in the UK for the previous tax year (whether or |
| 35 |
not it was a split year). |
| |
(3) | There is at least one period (consisting of one or more days) that— |
| |
(a) | begins with a day that— |
| |
(i) | falls within the relevant year, and |
| |
(ii) | is a day on which the taxpayer does more than 3 hours’ work |
| 40 |
| |
(b) | ends with the last day of the relevant year, and |
| |
(c) | satisfies the overseas work criteria. |
| |
|
| |
|