Income Tax (Trading and Other Income) Act 2005 section 771

Relevant foreign income of consular officers and employees

Section 771 provides an income tax exemption for relevant foreign income received by consular officers and employees of foreign states who are based in the United Kingdom, provided certain conditions are met and an Order in Council is in place.

• An exemption from income tax on relevant foreign income applies to consular officers and employees of a foreign state in the UK, but only where an Order in Council has been made to give effect to a reciprocal arrangement with that state.
• The individual must not be a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen (Condition A), and must not carry on any trade, profession, vocation or other employment in the UK apart from their consular role (Condition B).
• The individual must either be a permanent employee of the foreign state, or must have been non-UK resident for each of the two tax years before they took up their consular role in the UK (Condition C).
• The term "consular officer or employee" is broadly defined and includes anyone employed in the official business of a consular officer at a consulate, consular establishment or other premises used for those purposes.