Finance Act 2008

Relevant foreign income

53 For section 832 substitute—

“832 Relevant foreign income charged on remittance basis

(1) This section applies to an individual’s relevant foreign income for a tax year (“the relevant foreign income”) if section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for that year.

(2) For any tax year in which—

(a) the individual is UK resident, and

(b) any of the relevant foreign income is remitted to the United Kingdom,

income tax is charged on the full amount of the relevant foreign income so remitted in that year.

(3) Subsection (2) applies whether or not the source of the income exists when the income is remitted.

(4) See Chapter A1 of Part 14 of ITA 2007 for the meaning of “remitted to the United Kingdom” etc.

832A Section 832: temporary non-residents

(1) This section applies if—

(a) an individual satisfies the residence requirements for any tax year (“the year of return”),

(b) the individual did not satisfy those requirements for one or more tax years immediately before the year of return but did satisfy those requirements for an earlier tax year,

(c) there are fewer than 5 tax years between—

(i) the last tax year before the year of return for which the individual satisfied those requirements (“the year of departure”), and

(ii) the year of return, and

(d) the individual satisfied those requirements for at least 4 out of the 7 tax years immediately before the year of departure.

(2) Treat any of the individual’s relevant foreign income within subsection (3) which is remitted to the United Kingdom after the year of departure and before the year of return as remitted to the United Kingdom in the year of return.

(3) Relevant foreign income is within this subsection if—

(a) it is for the year of departure or any earlier tax year, and

(b) section 832 applies to it.

(4) For the purposes of subsection (1) an individual “satisfies the residence requirements” for a tax year if—

(a) at any time in that year, the individual is UK resident and not Treaty non-resident, or

(b) the individual is ordinarily UK resident, and is not Treaty non-resident, for that year.

(5) For the purposes of subsection (4) an individual is “Treaty non-resident” at any time if, at that time, he is regarded as resident in a territory outside the United Kingdom for the purposes of double taxation relief arrangements having effect at that time.

(6) In subsection (5) “double taxation relief arrangements” means arrangements specified in an Order in Council making any such provisions as are referred to in section 788 of ICTA.

832B Section 832: deductions from remitted income

(1) The only case in which deductions are allowed from the income mentioned in section 832(2) is where the income is from a trade, profession or vocation carried on outside the United Kingdom.

(2) In that case the same deductions are allowed as are allowed under the Income Tax Acts where the trade, profession or vocation is carried on in the United Kingdom.”