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

Limit on relief

Section 41R sets out how to calculate the maximum amount of foreign employment relief that a qualifying new resident can claim for any given tax year.

• The relief for any year is capped at the lower of 30% of relevant qualifying employment income or £300,000.
• Relevant qualifying employment income includes not only the current year's net taxable employment income that counts as qualifying employment income, but also qualifying employment income from earlier years back to (but not before) the qualifying year.
• Where a claim is made for a year after the qualifying year, the cap is reduced by any amounts of qualifying foreign employment income already relieved under section 41P in previous years.
• The calculation of relevant qualifying employment income follows the method in section 41Q, but broadened to cover all qualifying employment income rather than only the foreign element.