Paragraph 22 of Schedule 7 of Finance Act 2008 introduces a new
Chapter 5A of Part 2 ITEPA 2003 to deal with the effect of the
remittance basis on the taxation of employment- related securities.
If an amount counts as employment income under Chapters 2, 3
or 3C to 5 (excluding section 446UA) of Part 7 ITEPA, and the
remittance basis applies during any part of the relevant period
(see
ERSM160700 for guidance on relevant
periods), then ITEPA03/S41A will apply.
Subsection (4) provides that, instead of the whole amount
which counts as employment income being taxable in the UK on the
arising basis, only that part which relates to the UK is so
taxable.
It achieves this by use of a formula:
taxable specific income = SI – FSI
where
SI is the amount of the securities income, and
FSI is the amount of the securities income that is ‘foreign’
The extent to which the securities income is ‘foreign’ is determined under ITEPA03/S41C (see ERSM160800).
