Employment Income: Scope |
23 |
(e) Foreign emoluments—corresponding payments (section 355 ex 192) |
Foreign emoluments may attract further deductions for ‘corresponding payments’.144 Payments are ‘corresponding’ if they are similar to payments which would be deductible if all the relevant elements were in the UK. Examples include alimony paid under a foreign court order, interest on a loan to purchase a sole or main residence in the employee’s home country, and annual contributions to a foreign pension fund which corresponds to a UK pension fund for which relief could be given. Such payments are allowable only if they are made out of the foreign emoluments and, save for pension contributions, Revenue practice may require proof that there is not sufficient overseas income (on which UK tax is not payable) to enable the payments to be made without having recourse to the foreign emoluments.145 |
13A.3.3 Double Tax Treaties |
The effect of double tax treaties on a person who is not resident in the UK may be to grant exemption from schedule E. |
13A.3.4 Note for Seafarers and History section 377 |
From 1974 until 1998 it was possible for an employee who had earnings for services rendered abroad (whether for a foreign or UK-based employer) to claim a 100% deduction for payments for those services.146 Since 1998 this has been possible only for seafarers.147 The rule remains of general importance for past years and for certain termination payments attributable to past years.148 From 1974 until 1992 it was even possible to claim pension contribution deductions.149 To qualify for the 100% deduction the earnings had to be for a ‘qualifying period’ of at least 365 days of absence from the UK. Complicated rules related to the number of days the employee was allowed back in the UK during this period. This was repealed in 1998 because it was being ‘exploited’ by ‘a few’ high-earning individuals who were able to arrange their affairs so that they did not pay tax in the other country either.150 If these words are to be taken at face value the sensible thing would have been to tie the 100% deduction |