What are foreign income and gains under section 809Z7 of the Income Tax Act 2007?

Under section 809Z7, foreign income and gains comprise four categories: relevant foreign earnings from overseas employment duties, foreign specific employment income from employment-related securities and third-party arrangements, relevant foreign income covering non-employment overseas income such as dividends and rent, and foreign chargeable gains on disposals of foreign assets. These are only taxable under the remittance basis when brought into the UK.

What are relevant foreign earnings for remittance basis purposes?

Relevant foreign earnings are employment income arising from duties performed outside the UK. The precise definition depends on whether the individual meets a specific three-year non-residence condition. If the condition is not met, relevant foreign earnings are chargeable overseas earnings. If met, they are the individual's non-UK general earnings, as defined in the employment income legislation.

What does foreign specific employment income include under section 809Z7?

Foreign specific employment income has two limbs. The first covers gains on employment-related securities where the duties giving rise to the award were performed overseas. The second covers income arising under disguised remuneration rules, where employment income is provided through third parties and the relevant step is allocated to the tax year under applicable apportionment rules.

How are foreign chargeable gains defined for remittance basis individuals?

Foreign chargeable gains are capital gains accruing to the individual during the tax year on the disposal of foreign assets. The definition of foreign assets is taken from the capital gains tax legislation. Under the remittance basis, these gains are only subject to UK tax if and when they are remitted to the United Kingdom by the non-domiciled individual.

Income Tax Act 2007 section 809Z7

Meaning of "foreign income and gains" etc.

Section 809Z7 defines the key terms used throughout the remittance basis chapter to identify what counts as an individual's foreign income and gains for a tax year.

Foreign income and gains comprise four categories: relevant foreign earnings, foreign specific employment income, relevant foreign income, and foreign chargeable gains
Relevant foreign earnings are either chargeable overseas earnings or non-UK general earnings, depending on whether the individual meets specific residence requirements
Foreign specific employment income covers income from foreign employment-related securities and certain income provided through third-party arrangements
Foreign chargeable gains are capital gains arising on the disposal of foreign assets during the tax year

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