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(3) Subsection (2) applies— | |
(a) whether the earnings are for that year or for some other tax year, and | |
(b) whether or not the employment is held at the time when the earnings | |
are received. | |
(4) Section 28 explains what is meant by “general earnings from overseas Crown | 5 |
employment subject to United Kingdom tax”. | |
Special class of earnings for purposes of sections 25 to 27 | |
28 Meaning of “general earnings from overseas Crown employment subject to | |
UK tax” | |
(1) This section explains for the purposes of sections 25 to 27 what is meant by | 10 |
“general earnings from overseas Crown employment subject to United | |
Kingdom tax”. | |
(2) “Crown employment” means employment under the Crown— | |
(a) which is of a public nature, and | |
(b) the earnings from which are payable out of the public revenue of the | 15 |
United Kingdom or of Northern Ireland. | |
(3) “General earnings from overseas Crown employment” means general earnings | |
from such employment in respect of duties performed outside the United | |
Kingdom. | |
(4) Such earnings are to be taken as being “subject to United Kingdom tax” unless | 20 |
they fall within any exception contained in an order under subsection (5). | |
(5) The Board of Inland Revenue may make an order excepting from the operation | |
of sections 25(2) and 27(2) — | |
(a) general earnings of any description of employee specified in the order; | |
(b) general earnings from any description of employment so specified. | 25 |
(6) The Board may make the order if they consider that such earnings should not | |
be subject to those provisions having regard to the international obligations of | |
Her Majesty’s Government and such other matters as appear to them to be | |
relevant. | |
(7) An order may make provision by reference to all or any of the following— | 30 |
(a) the residence or nationality of the employee; | |
(b) whether the employee was engaged in or outside the United Kingdom; | |
(c) the nature of the post, the rate of remuneration and any other terms and | |
conditions applying to it. | |
(8) Subsection (7) does not affect the generality of the power to make provision by | 35 |
reference to such factors as the Board consider appropriate. | |
Year for which general earnings are earned | |
29 Meaning of earnings “for” a tax year | |
(1) This section applies for determining whether general earnings are general | |
earnings “for” a particular tax year for the purposes of this Chapter. | 40 |
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(2) General earnings that are earned in, or otherwise in respect of, a particular | |
period are to be regarded as general earnings for that period. | |
(3) If that period consists of the whole or part of a single tax year, the earnings are | |
to be regarded as general earnings “for” that tax year. | |
(4) If that period consists of the whole or parts of two or more tax years, the part | 5 |
of the earnings that is to be regarded as general earnings “for” each of those tax | |
years is to be determined on a just and reasonable apportionment. | |
(5) This section does not apply to any amount which is required by a provision of | |
Part 3 to be treated as earnings for a particular tax year. | |
30 Treatment of earnings for year in which employment not held | 10 |
(1) This section applies for the purposes of this Chapter in a case where general | |
earnings from an employment would otherwise fall to be regarded as general | |
earnings for a tax year in which the employee does not hold the employment. | |
(2) If that year falls before the first tax year in which the employment is held, the | |
earnings are to be treated as general earnings for that first tax year. | 15 |
(3) If that year falls after the last tax year in which the employment was held, the | |
earnings are to be treated as general earnings for that last tax year. | |
(4) This section does not apply in connection with determining the year for which | |
amounts are to be treated as earnings under Chapters 2 to 11 of Part 3 (the | |
benefits code). | 20 |
When general earnings are received or remitted | |
31 Receipt of money earnings | |
(1) General earnings consisting of money are to be treated for the purposes of this | |
Chapter as received at the earliest of the following times— | |
Rule 1 | 25 |
The time when payment is made of or on account of the earnings. | |
Rule 2 | |
The time when a person becomes entitled to payment of or on account of the | |
earnings. | |
Rule 3 | 30 |
If the employee is a director of a company and the earnings are from | |
employment with the company (whether or not as director), whichever is the | |
earliest of— | |
(a) the time when sums on account of the earnings are credited in the | |
company’s accounts or records (whether or not there is any restriction | 35 |
on the right to draw the sums); | |
(b) if the amount of the earnings for a period is determined by the end of | |
the period, the time when the period ends; | |
(c) if the amount of the earnings for a period is not determined until after | |
the period has ended, the time when the amount is determined. | 40 |
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(2) Rule 3 applies if the employee is a director of the company at any time in the | |
tax year in which the time mentioned falls. | |
(3) In this section “director” means— | |
(a) in relation to a company whose affairs are managed by a board of | |
directors or similar body, a member of that body, | 5 |
(b) in relation to a company whose affairs are managed by a single director | |
or similar person, that director or person, and | |
(c) in relation to a company whose affairs are managed by the members | |
themselves, a member of the company, | |
and includes any person in accordance with whose directions or instructions | 10 |
the directors of the company (as defined above) are accustomed to act. | |
(4) For the purposes of subsection (3) a person is not to be regarded as a person in | |
accordance with whose directions or instructions the directors of the company | |
are accustomed to act merely because the directors act on advice given by that | |
person in a professional capacity. | 15 |
(5) Where this section applies— | |
(a) to a payment on account of general earnings, or | |
(b) to sums on account of general earnings, | |
it so applies for the purpose of determining the time when an amount of | |
general earnings corresponding to the amount of that payment or those sums | 20 |
is to be treated as received for the purposes of this Chapter. | |
32 Receipt of non-money earnings | |
(1) General earnings not consisting of money are to be treated for the purposes of | |
this Chapter as received at the following times. | |
(2) If an amount is treated as earnings for a particular tax year under any of the | 25 |
following provisions, the earnings are to be treated as received in that year— | |
section 81 (taxable benefits: cash vouchers), | |
section 94 (taxable benefits: credit-tokens), | |
Chapter 5 of Part 3 (taxable benefits: living accommodation), | |
Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits), | 30 |
Chapter 7 of Part 3 (taxable benefits: loans), | |
Chapter 8 of Part 3 (taxable benefits: notional loans in respect of | |
acquisitions of shares), | |
Chapter 9 of Part 3 (taxable benefits: disposals of shares for more than | |
market value), | 35 |
Chapter 10 of Part 3 (taxable benefits: residual liability to charge), | |
section 222 (payments treated as earnings: payments on account of tax | |
where deduction not possible), | |
section 223 (payments treated as earnings: payments on account of | |
director’s tax). | 40 |
(3) If an amount is treated as earnings under section 87 (taxable benefits: non-cash | |
vouchers), the earnings are to be treated as received in the tax year mentioned | |
in section 88. | |
(4) If subsection (2) or (3) does not apply, the earnings are to be treated as received | |
at the time when the benefit is provided. | 45 |
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33 Earnings remitted to the United Kingdom | |
(1) This section explains what is meant for the purposes of this Chapter by general | |
earnings being remitted to the United Kingdom. | |
(2) If general earnings are— | |
(a) paid, used, or enjoyed in the United Kingdom, or | 5 |
(b) transmitted or brought to the United Kingdom in any manner or form, | |
they are to be treated as remitted to the United Kingdom at the time when they | |
are so paid, used or enjoyed or dealt with as mentioned in paragraph (b). | |
(3) If, in the case of an employee who is ordinarily resident in the United | |
Kingdom, general earnings are used outside the United Kingdom to satisfy a | 10 |
UK-linked debt, they are to be treated as remitted to the United Kingdom at the | |
time when they are so used. | |
This is subject to subsection (5)(b). | |
(4) In subsection (3) “UK-linked” debt, in relation to an employee, means— | |
(a) a debt for money lent to the employee in the United Kingdom, or for | 15 |
interest on money so lent, or | |
(b) a debt for money lent to the employee outside the United Kingdom and | |
received in the United Kingdom, or | |
(c) a debt incurred for satisfying— | |
(i) a debt falling within paragraph (a) or (b), or | 20 |
(ii) another debt falling within this paragraph. | |
(5) In the case of a debt (within subsection (4)(b) or (c)) for money lent to the | |
employee outside the United Kingdom — | |
(a) it does not matter whether the money lent is received in the United | |
Kingdom before or after the general earnings are used to satisfy the | 25 |
debt, but | |
(b) if the money lent is not received in the United Kingdom until after the | |
general earnings are used to satisfy the debt, the general earnings are to | |
be treated as remitted to the United Kingdom at the time when the | |
money lent is received there (instead of at the time provided in | 30 |
subsection (3)). | |
(6) In subsections (4) and (5) any reference to money lent being received in the | |
United Kingdom includes a reference to its being brought there. | |
(7) Section 34 (further provisions about UK-linked debts) applies for the purposes | |
of subsections (3) to (5). | 35 |
34 Earnings remitted to the United Kingdom: further provisions about UK- | |
linked debts | |
(1) This section applies for the purposes of the provisions of section 33 which | |
relate to general earnings that are used to satisfy a UK-linked debt. | |
(2) General earnings are to be treated as used to satisfy a debt for money lent to a | 40 |
person (“the borrower”) if conditions A and B are met. | |
(3) Condition A is that the earnings are dealt with in such a way that the lender | |
holds money or property representing the earnings on behalf of or on account | |
of the borrower in such circumstances that it is available to the lender to satisfy | |
or reduce the debt (by set-off or otherwise). | 45 |
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(4) Condition B is that under an arrangement between the borrower and the | |
lender— | |
(a) the amount for the time being owed by the borrower to the lender, or | |
(b) the time at which the debt is to be wholly or partly repaid, | |
depends in any respect, directly or indirectly, on the amount or value the | 5 |
lender holds on behalf of or on account of the borrower as mentioned in | |
subsection (3). | |
(5) If and to the extent that money lent is used to satisfy a debt, the debt for the | |
money lent is to be treated as incurred for satisfying that other debt. | |
(6) In this section “lender” includes, in relation to any money lent, any person for | 10 |
the time being entitled to repayment. | |
(7) In this section and section 33 “satisfy”, in relation to a debt, means satisfy | |
wholly or in part. | |
Relief for delayed remittances | |
35 Relief for delayed remittances | 15 |
(1) A person may make a claim for relief under this section for a tax year in respect | |
of delayed remittances from an employment. | |
(2) “Delayed remittances” are general earnings of the person which— | |
(a) were received in a country or territory outside the United Kingdom | |
before the tax year for which relief is claimed, | 20 |
(b) were not remitted to the United Kingdom until that tax year, | |
(c) could not have been transferred by the person to the United Kingdom | |
before that tax year because of— | |
(i) the laws of the country or territory where they were received, | |
(ii) executive action of its government, or | 25 |
(iii) the impossibility of obtaining there currency (other than the | |
currency of that country or territory) that could be transferred | |
to the United Kingdom, and | |
(d) constitute taxable earnings from the employment in that tax year under | |
section 22(2) or 26(2) (general earnings which are taxable earnings if | 30 |
remitted to UK). | |
(3) If a person claims relief for a tax year in respect of delayed remittances from an | |
employment, the amount of the remittances— | |
(a) is to be deducted from the person’s general earnings which constitute | |
taxable earnings from the employment in that year under section 22(2) | 35 |
or 26(2); and | |
(b) is instead to constitute taxable earnings from the employment under | |
that provision in one or more earlier tax years in accordance with— | |
(i) subsection (4), or | |
(ii) alternatively, section 36 where an election is made under that | 40 |
section. | |
(4) Where this subsection applies— | |
(a) the amount referred to in subsection (3)(b) is to be treated as taxable | |
earnings from the employment in the tax year in which it was received, | |
or | 45 |
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(b) if it consists of general earnings received in two or more tax years, so | |
much of the amount as was received in each of those years is to be | |
treated as taxable earnings from the employment in that year. | |
36 Election in respect of delayed remittances | |
(1) This section applies if— | 5 |
(a) a person (“the claimant”) claims relief under section 35 for a tax year in | |
respect of delayed remittances from an employment, and | |
(b) at the end of that year the claimant had blocked earnings from that | |
employment for one or more previous tax years. | |
(2) General earnings are “blocked earnings” for a tax year if they— | 10 |
(a) were received in a country or territory outside the United Kingdom in | |
that year, | |
(b) could not be transferred by the claimant to the United Kingdom in that | |
year because of any of the things mentioned in section 35(2)(c), and | |
(c) would have constituted taxable earnings from the employment in that | 15 |
year under section 22(2) or 26(2) (general earnings which are taxable | |
earnings if remitted to UK) if they had been so transferred. | |
(3) The claimant may elect for the purposes of section 35(3)(b) to have the amount | |
of the delayed remittances treated as taxable earnings from the employment in | |
one or more tax years specified in the election. | 20 |
(4) A claimant may only specify a particular tax year if— | |
(a) there were blocked earnings of the claimant for that year from the | |
employment, and | |
(b) it is a year prior to the tax year for which relief is claimed. | |
(5) If more than one year is specified, the election must indicate the amount which | 25 |
is to be treated as taxable earnings in each of those years. | |
(6) However the amount of the delayed remittances which the claimant elects to | |
be treated as taxable earnings in a particular tax year must not exceed— | |
![equation: plus[times[char[B],char[E]],minus[times[char[P],char[C]]]]](missing.gif) | |
where— | 30 |
BE is the amount of blocked earnings of the claimant for that year from the | |
employment, and | |
PC is the amount of remittances treated as taxable earnings from the | |
employment in that year as a result of a previous claim by the claimant | |
under section 35. | 35 |
(7) An election under this section— | |
(a) must be made as part of the claim under section 35, and | |
(b) is irrevocable. | |
(8) A person’s personal representatives may make any election under this section | |
which the person might have made. | 40 |
37 Claims for relief on delayed remittances | |
(1) A claim under section 35 must be made on or before the fifth anniversary of the | |
normal self-assessment filing date for the tax year for which relief is claimed. | |
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(2) All adjustments (by way of repayment of tax, assessment or otherwise) are to | |
be made which are necessary to give effect to section 35. | |
(3) Those adjustments may be made at any time, despite anything to the contrary | |
in the Income Tax Acts. | |
(4) A person’s personal representatives may make any claim under section 35 | 5 |
which the person might have made. | |
(5) If a person dies— | |
(a) any tax paid by the person and repayable because of a claim under | |
section 35 is to be repaid to the person’s personal representatives, and | |
(b) the person’s personal representatives are liable for any additional tax | 10 |
which arises because of a claim under that section. | |
(6) Where subsection (5)(b) applies, the additional tax— | |
(a) is to be assessed on the personal representatives, and | |
(b) is a debt due from and payable out of the estate. | |
Place of performance of duties of employment | 15 |
38 Earnings for period of absence from employment | |
(1) This section applies if a person ordinarily performs the whole or part of the | |
duties of an employment in the United Kingdom. | |
(2) General earnings for a period of absence from the employment are to be treated | |
for the purposes of this Chapter as general earnings for duties performed in the | 20 |
United Kingdom except in so far as they would, but for that absence, have been | |
general earnings for duties performed outside the United Kingdom. | |
39 Duties in UK merely incidental to duties outside UK | |
(1) This section applies if in a tax year an employment is in substance one whose | |
duties fall to be performed outside the United Kingdom. | 25 |
(2) Duties of the employment performed in the United Kingdom whose | |
performance is merely incidental to the performance of duties outside the | |
United Kingdom are to be treated for the purposes of this Chapter as | |
performed outside the United Kingdom. | |
(3) This section does not affect any question as to— | 30 |
(a) where any duties are performed, or | |
(b) whether a person is absent from the United Kingdom, | |
for the purposes of section 378 (deduction from seafarers’ earnings: eligibility), | |
and section 383 (place of performance of incidental duties) applies instead. | |
40 Duties on board vessel or aircraft | 35 |
(1) Duties which a person performs on a vessel engaged on a voyage not | |
extending to a port outside the United Kingdom are to be treated for the | |
purposes of this Chapter as performed in the United Kingdom. | |
(2) Duties which a person resident in the United Kingdom performs on a vessel or | |
aircraft engaged— | 40 |
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