Relevant foreign income meaning

The appeals commission, in its ruling of 13 December 2023, determined that the royalty levy was not a charge on profits and therefore represented a cost of carrying on business within the relevant jurisdiction. Consequently, it concluded the company ought not to have borne a €5m tax charge. The TAC withheld the appellant’s identity, describing it as a company incorporated in Ireland and resident for tax there. According to the decision, the company worked closely with licensees in other countries to distribute its products. Those licensees applied royalty withholding to sales proceeds, consistent with local withholding requirements. The company treated the amounts as a deductible business expense, contending...

Beard v HMRC [2025] EWCA Civ 385 Section 402(1) of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005) levies income tax on dividends paid by companies that are not UK resident. Under s 402(4), dividends do not encompass ‘dividends of a capital nature’. Aside from that carve-out, the statute does not define ‘dividend’. The Explanatory Notes to the Bill that became ITTOIA 2005 indicate that identifying a dividend ‘will usually be a matter of referring to the relevant company law’. Case law has clarified the concept of a ‘dividend’ in other settings (for example, Memec v IRC [1996] STC 1336) and the capital versus income character of payments (for example, IRC v Reid’s Trustees [1949] AC 361, In re Duff’s Settlement [1951] Ch 923, Rae v Lazard [1963] 1 WLR 555, Courtaulds v Fleming [1969] 1 WLR 1683, Sinclair v Lee [1993] Ch 497 and First Nationwide v RCC [2012] EWCA Civ 278). The Court of Appeal had to decide whether distributions from a company incorporated...

Introduction and context This Practice Note provides a summary of the taxation of internationally mobile employees in relation to securities options (Options) charged to tax within Chapter 5 of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). On 30 October 2024, as part of the Autumn Budget 2024 announcements, the Labour government confirmed that it would proceed with the former Conservative government’s plans to abolish the remittance basis of taxation and replace it with a residence‑based regime, scheduled to commence on 6 April 2025. These changes were enacted through Finance Act 2025 (FA 2025) and have also affected, in particular, the availability and operation of overseas workday relief. This Practice Note reflects the current position under the new tax regime; however, the previous regime is still relevant for Options granted before 6 April 2025, because any elements of the Options’ ‘relevant period’ (see discussion below—broadly, the vesting period) that occur before 6 April 2025 remain subject to certain aspects of the earlier rules. For...

Variation of Will or intestacy after death—Q&As An instrument of variation can be used to alter how a deceased person’s estate is distributed under a Will or on intestacy. It is commonly executed by deed. To secure effectiveness—typically to obtain favourable inheritance tax (IHT) and capital gains tax (CGT) treatment under section 142 of the Inheritance Tax Act 1984 (IHTA 1984) and section 62(6) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992)—certain formalities must be met. These include that the deed is in writing, contains the requisite statement applying the statutory provisions, is not made for any extraneous consideration, and is signed by all relevant parties, including the deceased’s personal representatives (PRs) where additional tax would otherwise arise. For guidance on deeds of variation, see Practice Note: Variation of Will or intestacy after death. See also Practice Note: Post-death rearrangements. Compliance with these requirements will usually deliver the intended IHT and CGT position. The formalities for execution of variation should be followed accordingly. Precedent deed of variation...

This Practice Note has been archived and is no longer maintained. Finance Act 2025 (FA 2025) brings in legislation to abolish the remittance basis of taxation and to replace it with a residence-based regime from 6 April 2025. Adjustments have also been made to overseas workday relief, so that an employee’s entitlement depends on their residence for the relevant tax year and, subject to certain transitional provisions, whether they are eligible for the four-year foreign income and gains regime for that year. For details on these updates, see the following Practice Notes: The abolition of the remittance basis of taxation from 2025–26 Foreign income and gains regime from 6 April 2025 Overseas Workday Relief from 6 April 2025 For the OWR rules that applied before 6 April 2025, see Practice Note: The statutory residence test—overseas workday relief before 6 April 2025 [Archived]. Facts Petra is a German national and is domiciled in Germany for UK tax purposes....