Income Tax (Earnings and Pensions) Act 2003 section 24

Limit on chargeable overseas earnings where duties of associated employment performed in UK

Section 24 limits the amount of earnings that can qualify as chargeable overseas earnings (and therefore be taxed on the remittance basis) where an employee also holds associated employments whose duties are not performed entirely outside the UK.

• Where an employee holds associated employments alongside the relevant employment and some duties of those associated employments are performed in the UK, a cap applies to the amount that can be treated as chargeable overseas earnings
• The cap is a reasonable proportion of the combined net earnings from all the employments, determined by reference to the nature of and time devoted to duties performed outside and inside the UK, plus all other relevant circumstances
• Associated employments are employments with the same employer or with employers linked by common control — whether those employers are individuals, partnerships or companies
• Any earnings that exceed the cap and therefore lose their chargeable overseas earnings status do not escape tax altogether; instead, they fall back into the general earnings charge as UK-taxable employment income