Part 2 U.K. Employment income: charge to tax

Modifications etc. (not altering text)

C1 Pt. 2 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 969(4)(a), 1329(1) (with Sch. 2 Pts. 1, 2)

C2 Pt. 2 applied (E.W.S.) (31.3.2017) by The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 (S.I. 2017/353), reg. 1(1), Sch. 1 para. 4(3) (with reg. 2(4)(5))

[F1 Chapter 5C U.K. Relief for new residents on foreign employment income

Textual Amendments

F1 Pt. 2 Ch. 5C inserted (20.3.2025 for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 38(1)(3) (with Sch. 8 Pt. 3)

Claim for relief U.K.

41Q Amount of relief available U.K.

(1) For the purposes of section 41P(2), the amount of net taxable employment income for a tax year that “reflects” qualifying foreign employment income is the total of—

(a) the total of the amount of the net taxable earnings from each employment in the tax year that reflects qualifying foreign general earnings (see subsections (2) to (5)), and

(b) the total of the amount of the net taxable specific income from each employment for the tax year that reflects qualifying foreign third party income or qualifying foreign securities income (see subsection (6)).

(2) The amount of the net taxable earnings from an employment in a tax year that “reflects” qualifying foreign general earnings is—

(a) the amount of the taxable earnings from the employment in the tax year that are qualifying foreign general earnings, minus

(b) the amount of the qualifying deductions.

(3) If the amount calculated under subsection (2) is nil or a negative amount, then none of the net taxable earnings from the employment in the tax year reflect qualifying foreign general earnings.

(4) If the foreign employment relief claim is for the qualifying year, the amount of the qualifying deductions is the proportion of the total deductions that is the same as the proportion of the claim year taxable earnings that are qualifying foreign general earnings.

(5) If the foreign employment relief claim is for a subsequent tax year, the amount of the qualifying deductions is the amount resulting from the following steps—

• Step 1

  Deduct the claim year taxable earnings from the total deductions.

  If the result is nil or a negative amount, there are no qualifying deductions.

• Step 2

  Deduct any other taxable earnings that are not qualifying foreign general earnings.

  If the result is nil or a negative amount, there are no qualifying deductions.

(6) The proportion of the net taxable specific income from an employment for a tax year that “reflects” qualifying foreign third party income or qualifying foreign securities income is the same as the proportion of the taxable specific income for the employment in that year that is qualifying foreign third party income or qualifying foreign securities income.

(7) In this section—

• “claim year taxable earnings” means the taxable earnings from the employment in the tax year that are “for” the year for which the claim is made determined in accordance with section 16 and 17;

• “total deductions” means the total amount of any deductions allowed from the taxable earnings from the employment in the tax year under provisions listed in section 327(3) to (5) (see section 11(1)).]