IR20 - Residents and non-residents liability to tax in the United ...

This guidance does not apply from 6 April 2009. The guidance it contains is replaced by the
guidance provided in HMRC6 – Residence, Domicile and the Remittance Basis. It is kept
available for those people who need to make reference to IR20 for their tax affairs before
5 April 2009.
The level of relief will depend on the extent of your overseas service. You qualify for full
exemption where in that employment
• at least 75% of your total service was overseas, or
• your total service exceeds 10 years and the whole of the last 10 years of service
have been overseas, or
• your total service exceeds 20 years and not less than 50% of total service,
including any 10 of the last 20 years, was overseas.
If you do not meet the conditions for full exemption, we will charge income tax only on
that percentage of the lump sum equivalent to your non-overseas service in that
employment.
Offshore oil and gas workers
5.17 If you work offshore in connection with the exploration or exploitation of UK oil or gas,
the rules set out in the first part of this Chapter still normally apply to you. In this context
‘offshore’ means
• the territorial sea of the UK (see paragraph 6 of the Introduction), and
• the UK continental shelf outside the territorial sea.
If, however, you are a resident of a country with which the UK has a double taxation
agreement, the normal rules may be affected by that agreement (see Chapter 9 on
agreements generally). Some of these include provisions specific to offshore oil and gas
activities. You should put any queries about your tax liabilities to your Tax Office, if your
employer is resident in the UK; or to Foreign Compliance, Compliance Centre 1, if your
employer is not resident in the UK.
Partnerships
5.18 If you carry on a trade or profession in a partnership, the table at 5.21 sets out the
position. In those circumstances, the remittance basis (see paragraph 5.12) may apply
to your overseas profit, where the trade
• is carried on wholly abroad, or
• is carried on partly abroad and the partnership is managed and controlled abroad
and in either case you are a UK resident partner and are
• not domiciled in the UK, or
• not ordinarily resident in the UK.
IR20 26
HMRC 03/09