PART 2Income for the purposes of tax credits

CHAPTER 9Foreign income

12.—(1) In these Regulations “foreign income” means income arising, in the year in question, from possessions or from securities out of the United Kingdom which is not—

(a)employment income;

(b)trading income; or

(c)investment income falling within regulation 10(1)(e).

This is subject to the following provisions of this regulation.

(2) The reference in paragraph (1) to income arising from or possessions or from securities out of the United Kingdom shall be construed in accordance with section 18(3B) of the Taxes Act(1).

(3) In calculating the claimant’s foreign income there shall be disregarded—

(a)any payment by way of an annuity or pension payable under any special provision for victims of National Socialist persecution which is made by the law of the Federal Republic of Germany, or any part of it, or of Austria;

(b)if the claimant’s foreign income comprises or includes a pension to which section 65(2) or section 196 of the Taxes Act applies, the amount authorised to be deducted by that section; and

(c)any amount which would be disregarded for the purposes of income tax by virtue of—

(i)Extra Statutory Concession A10 (lumps sums paid by overseas pension schemes);

(ii)Extra Statutory Concession A24 (foreign social security payments);

(iii)Extra Statutory Concession A30 (interest on damages for personal injuries awarded by a foreign court); or

(iv)Extra Statutory Concession A44 (education allowances payable to public officials of overseas territories).

(1)

Subsections (3B) to (3E) were inserted by paragraph 4(3) of Schedule 7 to the Finance Act 1996.