Income Tax (Earnings and Pensions) Act 2003 section 554Z11

Remittance basis: supplementary

Section 554Z11 provides supplementary rules for the remittance basis treatment of employment income delivered through third parties, dealing with how reductions in value are allocated, how sums or assets are traced for remittance purposes, and how overlapping steps and pre-2008 tax years are handled.

• Where only part of a relevant step's value qualifies for remittance basis treatment, any reduction to that value must be apportioned proportionately to the qualifying part based on its share before any reductions are applied.
• For remittance basis purposes, any sum of money involved in a relevant step is treated as deriving from the individual's employment income; where the step involves an asset rather than money, the asset is similarly treated as deriving from that employment income.
• Where a later relevant step overlaps with an earlier one, the sum or asset in the later step is treated as deriving from the sum or asset in the earlier step to the extent of the overlap, ensuring the remittance basis rules can trace the income through successive steps.
• For tax years 2007-08 and earlier, where the individual was UK resident but not domiciled or not ordinarily UK resident, the remittance basis rules apply as though the individual had made a formal claim, but a foreign employer does not include a person resident in the Republic of Ireland.