Commentary

E1.606 Arising basis—deductions and reliefs

Personal and employment tax

E1.606 Arising basis—deductions and reliefs

E1.606 Arising basis—deductions and reliefs

Certain deductions and reliefs may be taken into account in the calculation of relevant foreign income charged on the arising basis. The reliefs, which are set out in ITTOIA 2005, ss 838–840A (Pt 8, Ch 3), are limited in scope. They were originally introduced by FA 1914 when the remittance basis was withdrawn from most types of Schedule D Case IV and V income for persons domiciled and ordinarily resident in the UK.

Expenses attributable to the collection or payment of relevant foreign income

In calculating the amount of relevant foreign income that is charged to income tax for a year, a deduction is allowed for expenses incurred outside the UK that are attributable to the collection or payment of the income1. The deduction is only available where the relevant foreign income is charged to tax on the arising basis and not where the charge is on the remittance basis2.

The predecessor legislation (TA 1988, s 65(1)) was worded so as to allow the

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