EIM40207 - Employee resident, ordinarily resident or domiciled outside the United Kingdom: location of duties performed on a vessel or aircraft: example

Section 40 ITEPA 2003

See EIM40206 for an explanation of the legal background.

Example 1

An aircraft flies from London Heathrow to Edinburgh. The crew includes both resident and non- resident individuals.

All of the crew members are treated as performing duties in the United Kingdom during the flight. Their earnings for these duties will be UK-based earnings chargeable under Section 25 (resident but not ordinarily resident) or Section 27 (not resident).

Example 2

The aircraft makes a return flight from Edinburgh to Heathrow. It then flies on to Dusseldorf.

Residents are regarded as performing duties in the United Kingdom on both legs of the flight. Earnings for these duties are UK-based earnings chargeable under Section 25 (resident but not ordinarily resident).

Non residents are regarded as performing duties in the United Kingdom on the first leg, but duties on the second leg from London to Germany are not United Kingdom duties. Earnings for duties performed on the first leg only are UK-based earnings chargeable under Section 27.

Example 3

A merchant navy ship steams from Southampton to Ostend. It remains in United Kingdom coastal waters until it is off Harwich. It then leaves territorial waters.

Resident seafarers are regarded as performing all of the duties on the voyage in the United Kingdom. Earnings for these duties are UK-based earnings chargeable under Section 25 (resident but not ordinarily resident).

Non-resident seafarers are regarded as performing all of the duties of the voyage outside the United Kingdom

Different rules for the Seafarers’ Earnings Deduction: Part 5 Chapter 6

Note that different rules apply for the purposes of the Seafarers’ Earnings Deduction (see EIM33033).