SE33001 - Foreign Earnings Deduction (FED) - general conditions to 17 March 1998

Section 193(1) ICTA 1988

In the period to 17 March 1998 a Foreign Earnings Deduction (FED) was given if in any year of assessment the following conditions were met:

• The individual was Resident and Ordinarily Resident in the United Kingdom
• The individual had a 'qualifying period' of at least 365 days
• The individual held an office or employment, duties of which were performed wholly or partly outside the United Kingdom and any of those duties were performed in the course of a 'qualifying period' that fell wholly or partly in the year.

The tests are applied separately.

Deduction not exemption

FED is a deduction against Case I charge not an exemption. If it were an exemption the emoluments would then fall to be considered under Case III of Schedule E Because it is a deduction from emoluments chargeable under Case I the question of chargeability under Case III does not arise. Section 131(2) ICTA 1988 establishes this position.