An employee fails to qualify for full foreign service exemption
under
EIM13690. There is, however, some
foreign service during the employment, so the foreign service
reduction in
EIM13700 is considered.
An employee receives a termination payment within Section 401
ITEPA 2003 of £100,000. To calculate the foreign service
reduction, the first step is find the amount charged to tax (or,
more accurately, the amount that would otherwise count as
employment income, see
EIM13700), as follows:
| Termination payments and benefits within Section 401 ITEPA 2003 | £100,000 |
| Threshold (see EIM13505) | £30,000 |
| Amount charged to tax | £70,000 |
The reduction is then calculated using the £70,000 figure, see example EIM13985.
