Income Tax (Earnings and Pensions) Act 2003

Relief for delayed remittances

35 Relief for delayed remittances

(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,

(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

(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 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) 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 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

(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—

(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—

(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 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.

(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 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—

BE - PC

where—

• 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.

(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.

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.

(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 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 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.