Income Tax (Earnings and Pensions) Act 2003 section 681A

Foreign benefits of consular employees

Section 681A exempts certain foreign social security benefits received by consular officers and employees from income tax, provided specific nationality, employment, and residency conditions are met and a reciprocal arrangement is in place with the relevant foreign state.

• Foreign social security benefits paid to consular officers or employees in the UK are exempt from income tax where an Order in Council confirms a reciprocal arrangement with the foreign state concerned.
• The officer or employee must not be a British citizen, British overseas territories citizen, British National (Overseas), or British Overseas citizen (Condition A).
• The officer or employee must not carry on any other trade, profession, vocation, or employment in the UK beyond their consular role for that foreign state (Condition B).
• The officer or employee must either be a permanent employee of that foreign state, or have been non-UK resident for each of the two tax years before they took up the consular post in the UK (Condition C).