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Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

165

 

(a)   

the public access rule,

(b)   

the personal use rule,

(c)   

the repair rule, and

(d)   

the temporary importation rule.

809V    

Exempt property: public access rule

5

(1)   

This section applies for the purposes of sections 809T to 809Y.

(2)   

Property meets the public access rule if the following conditions are

met.

(3)   

Condition A is that, in relation to the importation of the property,

article 5(1) of the Value Added Tax (Imported Goods) Relief Order

10

1984 (S.I. 1984/746)—

(a)   

applies by virtue of Group 9 of Schedule 2 to that Order

(importation of works of art or collectors’ pieces by museums

etc), or

(b)   

would so apply if the following requirements were

15

disregarded—

(i)   

the requirement for the importation to be from a third

country; and

(ii)   

the requirement for the purpose of the importation to

be a purpose other than sale.

20

(4)   

Condition B is that the property—

(a)   

is in transit from a place outside the United Kingdom to

relevant premises, in transit between relevant premises, or in

storage at relevant premises, in advance of being available for

public access at an approved establishment,

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(b)   

is available for public access at an approved establishment, or

(c)   

is in storage at relevant premises, in transit between relevant

premises, or in transit from relevant premises to a place

outside the United Kingdom, after it has been available for

public access at an approved establishment.

30

(5)   

Condition C is that, after the importation of the property, it is in the

United Kingdom for a single period of not more than—

(a)   

two years, or

(b)   

such longer duration as the Commissioners may specify.

(6)   

A reference to importation of the property is a reference to—

35

(a)   

the property being brought to, or received or used in, the

United Kingdom in circumstances in which section

809L(2)(a) applies, and

(b)   

to the property being in the United Kingdom after being so

brought, received or used.

40

(7)   

“Relevant premises” are—

(a)   

premises in the United Kingdom at which the property is to

be, or has been, available for public access, or

(b)   

other premises in the United Kingdom used by the approved

establishment for the storage of property in advance of it

45

being, or after it has been, available for public access.

 
 

Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

166

 

(8)   

An “approved establishment” is an approved museum, gallery or

other institution (within the meaning of Group 9 of Schedule 2 to the

Value Added Tax (Imported Goods) Relief Order 1984 (S.I. 1984/

746).

(9)   

Property is “available for public access” at an approved

5

establishment if the property is—

(a)   

on public display at the establishment,

(b)   

held by the establishment and made available to the public

on request for viewing or for educational use, or

(c)   

held by the establishment for public exhibition in connection

10

with the sale of the property.

809W    

Exempt property: the other rules

(1)   

This section applies for the purposes of sections 809T to 809Y.

(2)   

Clothing, footwear, jewellery and watches meet the personal use rule

if they—

15

(a)   

are property of a relevant person, and

(b)   

are for the personal use of a relevant individual.

(3)   

For that purpose—

(a)   

“relevant person” has the meaning given by section 809L, and

(b)   

“relevant individual” means an individual who is a relevant

20

person by virtue of section 809L(2)(a), (b), (c) or (d) (the

individual with income or gains, or a husband, wife, civil

partner, child or grandchild).

(4)   

Property meets the repair rule if the property—

(a)   

is in transit from a place outside the United Kingdom to

25

relevant premises, in transit between relevant premises, or in

storage at relevant premises, in advance of repair or

restoration,

(b)   

is under repair or restoration, or

(c)   

is in storage at relevant premises, in transit between relevant

30

premises, or in transit from relevant premises to a place

outside the United Kingdom, following repair or restoration.

(5)   

For that purpose “relevant premises” means—

(a)   

premises in the United Kingdom that are to be used, or have

been used, for the repair or restoration referred to in

35

subsection (4)(a) or (c), or

(b)   

other premises in the United Kingdom used by the restorer

for the storage of property in advance of, or following, repair

or restoration of property;

   

and “restorer” means the person who is to carry out, or has carried

40

out, the repair or restoration referred to in subsection (4)(a) or (c).

(6)   

Property meets the temporary importation rule if the total number of

qualifying days is 275 or less.

(7)   

For that purpose a “qualifying day” is a day on which, or on part of

which, the property is in the United Kingdom by virtue of being

45

brought to, or received or used in, the United Kingdom in

circumstances in which section 809K(2)(a) applies (whether the

 
 

Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

167

 

current case, or a past case, when the property was so brought,

received or used).

(8)   

If property meets—

(a)   

the public access rule,

(b)   

the personal use rule, or

5

(c)   

the repair rule,

   

the period during which it meets that rule must be taken into account

in determining whether or not it meets the temporary importation

rule.

809X    

Exempt property: the notional remitted amount

10

(1)   

This section applies for the purposes of sections 809T to 809Y.

(2)   

The “notional remitted amount”, in relation to property, is the

amount of income that would be taken to be remitted to the United

Kingdom in relation to the property (if section 809T did not apply in

relation to the property).

15

(3)   

If—

(a)   

property forms part of a set, and

(b)   

only part of the set is in the United Kingdom,

   

the notional remitted amount is such part of the amount specified in

subsection (4) as is just and reasonable having regard to the part of

20

the set that actually is in the United Kingdom.

(4)   

That amount is the amount that would be taken to be remitted to the

United Kingdom if the complete set had been brought to, or received

or used in, the United Kingdom, at the same time as the part in

question.

25

809Y    

Exempt property: other interpretation

(1)   

This section applies for the purposes of sections 809T to 809X.

(2)   

“Property” does not include money.

(3)   

References to property being in the United Kingdom are references

to the property—

30

(a)   

being in the United Kingdom after being brought to, or

received in, the United Kingdom in circumstances in which

section 809K(2)(a) applies, or

(b)   

being used in the United Kingdom in circumstances in which

section 809K(2)(a) applies.

35

Interpretation of Chapter

809Z    

Interpretation of Chapter

(1)   

This section applies for the purposes of this Chapter.

(2)   

An individual’s “foreign income and gains” for a tax year are—

(a)   

the individual’s relevant foreign earnings for that year,

40

(b)   

the individual’s foreign specific employment income for that

year,

(c)   

the individual’s relevant foreign income for that year, and

 
 

Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

168

 

(d)   

if the individual is not domiciled in the United Kingdom in

that year, the individual’s foreign chargeable gains for that

year.

(3)   

An individual’s “relevant foreign earnings” for a tax year are—

(a)   

if the individual is ordinarily UK resident in that year, the

5

individual’s chargeable overseas earnings for that year, and

(b)   

otherwise, the individual’s general earnings within section

26(1) of ITEPA 2003 for that year (non-UK earnings).

(4)   

An individual’s “foreign specific employment income” for a tax year

is so much of the amounts within subsection (5) as are regarded as

10

foreign securities income for the purposes of section 41A of ITEPA

2003.

(5)   

An amount is within this subsection if it counts as employment

income of the individual for the tax year by virtue of any provision

of Chapters 2, 3 and 3C to 5 of Part 7 of ITEPA 2003 (employment-

15

related securities etc) except section 446UA.

(6)   

An individual’s “foreign chargeable gains” for a tax year are the

foreign chargeable gains (within the meaning of section 12(4) of

TCGA 1992) accruing to the individual in that year.

(7)   

In subsection (3)(a) “chargeable overseas earnings” has the same

20

meaning as in section 22 of ITEPA 2003 (see section 23 of that Act).”

Employment income

2          

ITEPA 2003 is amended as follows.

3     (1)  

Section 6 (nature of charge to tax on employment income) is amended as

follows.

25

      (2)  

In subsection (3), omit the “and” at the end of paragraph (a), and after that

paragraph insert—

“(aa)   

whether section 809B, 809C or 809D of ITA 2007 (remittance

basis) applies to an employee for a tax year, and”.

      (3)  

After that subsection insert—

30

“(3A)   

The rules in Chapter 5A, which are concerned with the matters

mentioned in subsection (3)(a) to (b), apply for the purposes of the

charge to tax on certain specific employment income arising under

Part 7 (securities etc).”

4     (1)  

Section 10 (meaning of “taxable earnings” etc) is amended as follows.

35

      (2)  

In subsection (2), for the words after “with” substitute “Chapters 4 and 5 of

this Part”.

      (3)  

After subsection (3) insert—

“(4)   

Subsection (3) is subject to Chapter 5A of this Part (certain specific

employment income under Part 7: individuals to whom to

40

remittance basis applies).”

5     (1)  

Section 13 (person liable to tax) is amended as follows.

 
 

Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

169

 

      (2)  

After subsection (4) insert—

“(4A)   

If the tax is on specific employment income received, or remitted to

the United Kingdom, after the death of the person in relation to

whom the income is, by virtue of Part 7, to count as employment

income, the person’s personal representatives are liable for the tax.”

5

      (3)  

In subsection (5), for “In that event” substitute “If subsection (4) or (4A)

applies,”.

6          

For the heading of Chapter 4 of Part 2 substitute “Taxable earnings: UK

resident employees”.

7          

In section 14(1) (taxable earnings under Chapter 4: introduction), for

10

“resident, ordinarily resident and domiciled in UK” substitute “UK

resident”.

8          

For the heading before section 15 substitute “UK resident employees”.

9     (1)  

Section 15 (earnings for year when employee resident, ordinarily resident

and domiciled in UK) is amended as follows.

15

      (2)  

In subsection (1), for the words from the first “resident” to the end substitute

“UK resident.”

      (3)  

For subsection (3) substitute—

“(3)   

Subsection (2) applies whether or not the employment is held when

the earnings are received.”

20

      (4)  

Accordingly, in the heading for “resident, ordinarily resident and

domiciled in UK” substitute “UK resident”.

10         

For the title to Chapter 5 of Part 2 substitute “Taxable earnings:

remittance basis rules and rules for non-uk resident employees“.

11    (1)  

Section 20 (taxable earnings under Chapter 5: introduction) is amended as

25

follows.

      (2)  

For subsection (1) substitute—

“(1)   

This Chapter—

(a)   

contains provision for calculating what are taxable earnings

from certain kinds of employment in a tax year for which

30

section 809B, 809C or 809D of ITA 2007 (remittance basis)

applies to the employee, and

(b)   

sets out what are taxable earnings from an employment in a

tax year in which the employee is non-UK resident.”

      (3)  

In subsection (2), omit paragraphs (b) and (c).

35

      (4)  

In subsection (3) for “the sections listed in subsection (1)” substitute

“sections 22, 26 and 27”.

12         

For the heading before section 21 substitute “Remittance basis rules for UK

ordinarily resident employees”.

13         

Omit section 21 (earnings for year when employee resident and ordinarily

40

resident, but not domiciled, in UK, except chargeable overseas earnings).

 
 

Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

170

 

14    (1)  

Section 22 (chargeable overseas earnings for year when employee resident

and ordinarily resident, but not domiciled, in UK) is amended as follows.

      (2)  

In subsection (1), for the words from “in which” to the end substitute “, to the

extent that they are chargeable overseas earnings for that year, if—

(a)   

section 809B, 809C or 809D of ITA 2007 (remittance basis)

5

applies to the employee for that year, and

(b)   

the employee is ordinarily UK resident in that year.”

      (3)  

For subsection (3) substitute—

“(3)   

Subsection (2) applies whether or not the employment is held when

the earnings are remitted.”

10

      (4)  

In subsection (4), omit the words after “year”.

      (5)  

In subsection (5)(b), for “section 21” substitute “section 15”.

      (6)  

After subsection (5) insert—

“(6)   

See sections 809K to 809Q of ITA 2007 for the meaning of “remitted

to the United Kingdom” etc.

15

(7)   

General earnings for the employee for the tax year fall within section

15(1) to the extent that they do not fall within subsection (1).”

      (7)  

Accordingly, in the heading, for the words from “employee” to the end

substitute “remittance basis applies and employee ordinarily UK

resident”.

20

15    (1)  

Section 23 (calculation of chargeable overseas earnings) is amended as

follows.

      (2)  

In subsection (1), for “sections 21 and” substitute “section”.

      (3)  

In subsection (2), for paragraph (a) substitute—

“(a)   

section 809B, 809C or 809D of ITA 2007 (remittance basis)

25

applies to the employee for that year,

(aa)   

the employee is ordinarily UK resident in that year,”.

16    (1)  

Section 24 (limit on chargeable overseas earnings where duties of associated

employment performed in UK) is amended as follows.

      (2)  

In subsection (7), for “section 21(1)” substitute “section 15(1)”.

30

      (3)  

After that subsection insert—

“(8)   

For the purposes of this section, no account is to be taken of the effect

of section 41D (limit on foreign securities income where duties of

associated employment performed in UK).”

17         

For the heading before section 25 substitute “Remittance basis rules: employees

35

not UK ordinarily resident”.

18         

Omit section 25 (UK-based earnings for year when employee resident, but

not ordinarily resident, in UK).

19    (1)  

Section 26 (foreign earnings for year when employee resident, but not

ordinarily resident, in UK) is amended as follows.

40

 
 

Finance Bill
Schedule 7 — Remittance basis
Part 1 — Main provisions

171

 

      (2)  

In subsection (1), for the words from “in which” to “they” substitute “where

section 809B, 809C or 809D of ITA 2007 (remittance basis) applies to the

employee for that year and the employee is not ordinarily UK resident in

that year, if the general earnings”.

      (3)  

For subsection (3) substitute—

5

“(3)   

Subsection (2) applies whether or not the employment is held when

the earnings are remitted.”

      (4)  

After subsection (4) insert—

“(5)   

See sections 809K to 809Q of ITA 2007 for the meaning of “remitted

to the United Kingdom” etc.

10

(6)   

General earnings for the employee for the tax year fall within section

15(1) if they do not fall within subsection (1).”

      (5)  

Accordingly, in the heading for the words from “employee” to the end

substitute “remittance basis applies and employee not ordinarily UK

resident”.

15

20    (1)  

Section 27 (UK-based earnings for year when employee non-UK resident) is

amended as follows.

      (2)  

For subsection (3) substitute—

“(3)   

Subsection (2) applies whether or not the employment is held when

the earnings are received.”

20

      (3)  

After subsection (4) insert—

“(5)   

Sections 18 and 19 (time when earnings are received) apply for the

purposes of this section.”

21         

Omit sections 31 to 37 (and the heading before section 31).

22         

After section 41 insert—

25

“Chapter 5A

Taxable specific income: effect of remittance basis

Introduction

41A     

Taxable specific income from employment-related securities: effect of

remittance basis

30

(1)   

This section applies if—

(a)   

an amount within subsection (2) counts as employment

income of an individual for a tax year in respect of an

employment (“the securities income”), and

(b)   

any part of the relevant period (see section 41B) is within a tax

35

year for which section 809B, 809C or 809D of ITA 2007

(remittance basis) applies to the individual.

(2)   

An amount is within this subsection if it counts as employment

income under any provision of any of Chapters 2, 3 and 3C to 5 of

Part 7 (employment-related securities etc) except section 446UA.

40

 
 

 
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