Income Tax (Earnings and Pensions) Act 2003 section 34

Earnings remitted to UK: further provisions about UK-linked debts

Section 34 provides additional rules for determining when overseas earnings are treated as being used to satisfy a UK-linked debt, and therefore count as remitted to the UK under the remittance basis.

• A person is treated as using their overseas earnings to satisfy a debt when two conditions are met: the earnings (or money or property representing them) are made available to the lender for debt repayment, and there is an arrangement linking the outstanding debt or its repayment schedule to the amount held by the lender.
• Where a person borrows money to pay off an existing debt, the borrowed funds can be treated as having been used towards satisfying the original debt.
• The term "lender" is broadly defined to include any person who is currently entitled to receive repayment, not just the original lender.
• The term "satisfy" in relation to a debt means satisfying it either wholly or in part, and this extended meaning also applies to the related provisions in section 33.