Employment Tax

Remittance basis ― overview

Produced by Tolley in association with Tim Humphries of Menzies LLP
  • 22 Dec 2021 14:31

The following Employment Tax guidance note Produced by Tolley in association with Tim Humphries of Menzies LLP provides comprehensive and up to date tax information covering:

  • Remittance basis ― overview
  • Standard remittance basis claim
  • Overseas Workday Relief (OWR)
  • Dual contracts
  • Record keeping
  • Special mixed fund rules
  • Making a claim for the remittance basis
  • The remittance basis charge

Remittance basis ― overview

A non-UK domiciled individual is entitled to claim the remittance basis of taxation so that they only pay tax on their UK source income and gains, and any offshore income and gains brought into the UK in some form. This guidance note considers the application of the remittance basis to employment income, how to make a claim for the remittance basis and areas to watch out for.

Standard remittance basis claim

In an employment context, the basic position is that under ITEPA 2003, s 22, the remittance basis can be claimed on earnings from a foreign employer which relate wholly to offshore duties and are paid into an offshore bank account. This is referred to in this note as a standard remittance basis claim. There are further scenarios in which it is possible to claim the remittance basis and these are explored further below.

Overseas Workday Relief (OWR)

A non-UK domiciled individual can claim OWR for the first three tax years for which they are resident in the UK. If the employee was previously UK resident, there must be a gap of at least three complete tax years before they can return to the UK and qualify for this relief again.

The relief allows an employee to just be taxed on their earnings that relate to their UK duties and any sums that relate to the offshore duties which are remitted to the UK. At least the proportion of the salary which relates to the offshore duties should be paid

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information

LEARN MORE LEARN MORE

Popular Articles

Qualifying year for state pension purposes

Why is this important?In order to get a full basic state pension, an individual must have paid sufficient national insurance contributions (NIC) for a minimum number of qualifying years in their working life. As NIC cannot be paid in the tax year before the individual reaches the age of 16, or in a

23 Nov 2021 16:11 | Produced by Tolley Read more Read more

Purchase of own shares ― overview

Companies Act 2006 allows a company to repurchase its own issued share capital, provided certain conditions are met. This type of transaction is sometimes referred to as a ‘share buyback’ or a ‘purchase of own shares’.The repurchased shares can either be immediately cancelled, which is typically the

22 Nov 2021 10:02 | Produced by Tolley Read more Read more

Pre-owned assets tax

Where a donor has made a gift of property and continues to use or benefit (or may benefit) from that property in some way, he may have made a gift with reservation of benefit for the purposes of inheritance tax (IHT).However, this will not be the case where:•a donor makes a gift of cash and the

19 Oct 2021 23:08 | Produced by Tolley Read more Read more