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Income Tax (Earnings and Pensions) Act 2003

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Changes over time for: Section 24

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Status:

Point in time view as at 17/12/2014.

Changes to legislation:

Income Tax (Earnings and Pensions) Act 2003, Section 24 is up to date with all changes known to be in force on or before 06 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

24Limit on chargeable overseas earnings where duties of associated employment performed in UKU.K.
This section has no associated Explanatory Notes

(1)This section imposes a limit on how much of an employee’s general earnings are chargeable overseas earnings for a tax year under section 23 if—

(a)in that year the employee holds associated employments as well as the employment to which subsection (2) of that section applies (“the relevant employment”), and

(b)the duties of the associated employments are not performed wholly outside the United Kingdom.

(2)The limit is the proportion of the aggregate earnings for that year from all the employments concerned that is reasonable having regard to—

(a)the nature of and time devoted to each of the following—

(i)the duties performed outside the United Kingdom, and

(ii)those performed in the United Kingdom, and

(b)all other relevant circumstances.

[F1(2A)If the tax year is a split year as respects the employee, subsection (2) has effect as if for “the aggregate earnings for that year from all the employments concerned” there were substituted “ so much of the aggregate earnings for that year from all the employments concerned as is attributable to the UK part of that year ”.]

(3)For the purposes of subsection (2) “the aggregate earnings for a year from all the employments concerned” means the amount produced by aggregating the full amount of earnings from each of those employments for the year mentioned in subsection (1) so far as remaining after subtracting any amounts of the kind mentioned in step 2 in section 23(3).

[F2(3A)Any attribution required for the purposes of subsection (2A) is to be done on a just and reasonable basis.]

(4)In this section—

(a)the employments concerned” means the relevant employment and the associated employments;

(b)associated employments” means employments with the same employer or with associated employers.

(5)The following rules apply to determine whether employers are associated—

Rule A

An individual is associated with a partnership or company if that individual has control of the partnership or company.

Rule B

A partnership is associated with another partnership or with a company if one has control of the other or both are under the control of the same person or persons.

Rule C

A company is associated with another company if one has control of the other or both are under the control of the same person or persons.

(6)In subsection (5)—

(a)in rules A and B “control” has the meaning given by [F3section 995 of ITA 2007] (in accordance with section 719 of this Act), and

(b)in rule C “control” means control within the meaning [F4given by sections 450 and 451 of CTA 2010] (meaning of expressions relating to close companies).

(7)If an amount of chargeable overseas earnings is reduced under step 3 in section 23(3) as a result of applying any limit imposed by this section, the amount of general earnings corresponding to the reduction remains an amount of general earnings within [F5section 15(1)].

Textual Amendments

F1S. 24(2A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 61(2)

F2S. 24(3A) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 61(3)

F3Words in s. 24(6)(a) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 428 (with Sch. 2)

F4Words in s. 24(6)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 379 (with Sch. 2)

F5Words in s. 24(7) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 16

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