EIM40323 - General earnings charged on remittance: relief for delayed remittances

Sections 35 to 37 ITEPA 2003

In certain circumstances general earnings charged on remittance can be spread backwards for assessment purposes. Claims must be made on or before the fifth anniversary of the normal self- assessment filing date for the tax year for which relief is claimed.

Claims are made under Section 35 and apply to general earnings taxable on remittance under Section 22 or Section 26. The following three conditions must all be satisfied:

• the earnings must be received outside the United Kingdom before the tax year for which relief is claimed
• the earnings must not be remitted to the United Kingdom until the tax year for which relief is claimed
• the earnings could not have been transferred to the United Kingdom before that year because of the laws of the country or territory where they were received or the executive action of its government or the impossibility of obtaining another currency that could be transferred to the United Kingdom.

Relief is given by deducting the remittances from taxable earnings in the year of remittance and treating them as taxable earnings in the year or years when the earnings were received. A claimant may elect under Section 36 to treat the remittances as taxable earnings in one or more previous tax years provided that the three conditions were satisfied in each of those years. The amount that can be spread back and treated as earnings of an earlier year cannot exceed the amount of earnings that could not be transferred to the United Kingdom in that earlier year.