Paragraph 126

In Chapter 2 of Part 7A (employment income provided through third parties: treatment of relevant step for income tax purposes), after section 554Z4 insert—

“Temporary non-residents

554Z4A

(1)

This section applies if A is temporarily non-resident.

(2)

Any relevant step within subsection (3) is to be treated for the purposes of section 554Z2 as if it were taken in the period of return.

(3)

A relevant step is within this subsection if—

(a)

it is the payment of a lump sum to a relevant person (see section 554C(2)),

(b)

the lump sum is a relevant benefit provided under a relevant scheme,

(c)

the step is taken in the temporary period of non-residence, and

(d)

ignoring this section—

(i)

no charge to tax arises by virtue of section 554Z2 by reason of the step, but

(ii)

such a charge would arise if the existence of any double taxation relief arrangements were disregarded.

(4)

Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made.

(5)

Nothing in any double taxation relief arrangements is to be read as preventing A from being chargeable to income tax in respect of any relevant step treated by virtue of this section as taken in the period of return (or as preventing a charge to that tax from arising as a result).

(6)

Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains—

(a)

when an individual is to be regarded as “temporarily non-resident”, and

(b)

what “the temporary period of non-residence” and “the period of return” mean.

(7)

In this section—

• “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

• “DTR claim” means a claim for relief under section 6 of that Act;

• “relevant benefit” has the same meaning as in Chapter 2 of Part 6;

• “relevant scheme” means an employer-financed retirement benefits scheme (within the meaning of that Chapter) or a superannuation fund to which section 615(3) of ICTA applies.”