Income Tax (Earnings and Pensions) Act 2003 section 700A

Employment-related securities etc.: internationally mobile employees

Section 700A reduces the amount on which PAYE must be operated when an internationally mobile employee receives employment-related securities and part or all of the resulting employment income qualifies as foreign securities income.

• The section applies where PAYE is triggered on employment-related securities (under section 698 or 700) and some or all of the income is, or is likely to be, foreign securities income
• The notional payment on which PAYE is operated is capped at the estimated employment income minus the estimated foreign securities income
• Only the UK-taxable portion of the securities income is subject to PAYE; the foreign element is excluded from the employer's withholding obligation
• Foreign securities income takes its meaning from section 41F, which deals with the tax treatment of specific income for internationally mobile employees