Income Tax (Earnings and Pensions) Act 2003 section 41M

Foreign employment election for qualifying new residents

Section 41M introduces the foreign employment election, which allows individuals who qualify as new UK residents to elect for special tax treatment of their foreign employment income.

• A qualifying new resident may make a foreign employment election for their qualifying year, which can provide relief on foreign employment income in that year and subsequent years
• The election must be made on a self-assessment tax return within 12 months of the 31 January filing deadline following the end of the qualifying year
• Making a foreign employment election has wider tax consequences, including the potential loss of the annual exempt amount for capital gains tax and restrictions on the use of losses and personal allowances
• The election cannot be made as a consequential claim if the circumstances giving rise to it result from a careless or deliberate loss of tax by the individual or their representative