SE40301 - Schedule E Case III: general

Sections 19(1)1 and 131(2) ICTA 1988

General

Case III of Schedule E charges emoluments that are

• For any year of assessment in which the employee or office holder is resident in the United Kingdom, but
• only to the extent that the emoluments are received in the United Kingdom in that or any other year, and
• so long as they are not already chargeable under Case I or Case II.

Emoluments caught by Case III

Emoluments for duties performed in the United Kingdom are always chargeable under Case I or Case II. The charge under Case III is, therefore, effectively restricted to emoluments arising from overseas duties.

Any emoluments that fall within Case I or Case II cannot be charged under Case III. For this purpose an emolument is chargeable under Case I even if no tax is actually payable because of entitlement to the Foreign Earnings Deduction (see SE33000 onwards). However, emoluments excepted from Case I by Section 192(2) ICTA may be charged under Case III.

Year emoluments are “for” and year of remittance

If emoluments fall into Case III in the year that they are “for” a potential charge is created. When the emoluments are received in the United Kingdom the charge crystallises and they become assessable in the year they are remitted here. This is true irrespective of the time that elapses between the year the emoluments are “for” and the year of remittance.

For the meaning of “emoluments received in the United Kingdom” see SE40302.