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Finance Act 2014


1.This section and Schedule tax certain overseas earnings and employment income of non-domiciled individuals on the ‘arising’ basis. In most cases this will apply where separate employment contracts have been artificially arranged to obtain a tax advantage (commonly known as “dual contracts”). This will have effect for income earned in tax year 2014-15 and thereafter. It will not apply to overseas income that falls within the 3-year period for Overseas Workday Relief set out at section 26 Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”).

2.Schedule 3 contains provision for taking certain overseas earnings, income relating to employment-related securities and securities options and employment income provided through third parties out of the scope of the remittance basis for UK resident non-domiciles. This will apply to income in respect of employment where:

  • An individual has both a UK employment and one or more “relevant” (i.e. foreign) employments.

  • The UK employer and the relevant employer are “associated” with each other.

  • The UK employment and the relevant employment are “related”, and

  • the foreign tax rate that applies to income in respect of a relevant employment, calculated in accordance with the amount of foreign tax credit relief which would be allowed against income tax if the income were not taxed on the remittance basis, is less than 65% of the UK’s additional rate of tax (currently 45%).

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