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

Amount of relief available

Section 41Q sets out how to calculate the amount of net taxable employment income that qualifies for foreign employment relief under the new resident relief provisions.

• The total relief available is the sum of the net taxable earnings reflecting qualifying foreign general earnings plus the net taxable specific income reflecting qualifying foreign third party or securities income.
• For general earnings, relief is calculated by taking the qualifying foreign general earnings and subtracting a proportion of allowable deductions, with the method differing depending on whether the claim is for the qualifying year or a subsequent tax year.
• If the calculation produces a nil or negative result at any stage, no relief is available for that element of the employment income.
• For specific income (such as third party payments or securities income), the relievable proportion matches the proportion of the total taxable specific income that is qualifying foreign income.