Hi Keith. Thanks for this encouraging advice. Our original view was that the accrual itself (in the Singapore Company accounts) is an acknowledgement of the existence of an employment liability which could be called in by the individual if they chose to do so (even though the funds don't exist to enable that to happen). Does not the debt between the employee and the Singapore company mean that the salary is "made available" for her to take and as such will be liable to tax in the UK even though funds aren't actually available and she has therefore not been paid. My concern is the "made available" definition. Can you confirm that your advice remains the same and if you could give us some legislative guidance on this, it would be appreciated
Hi Keith. Sorry to bother you again on this but can you look at Income Tax (Earnings & Pensions) Act 2003 s18(1) - especially Rule 3 (a). Does this affect your advice at all
I hold my position. The Act states:
'If an amount is treated as earnings for a particular tax year under any of the following provisions, the earnings are to be treated as received in that year
section 81 (taxable benefits: cash vouchers),
section 94 (taxable benefits: credit-tokens),
Chapter 5 of Part 3 (taxable benefits: living accommodation),
Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits),
Chapter 7 of Part 3 (taxable benefits: loans),
Chapter 8 of Part 3 (taxable benefits: notional loans in respect of acquisitions of shares),
Chapter 9 of Part 3 (taxable benefits: disposals of shares for more than market value),
Chapter 10 of Part 3 (taxable benefits: residual liability to charge),
section 222 (payments treated as earnings: payments on account of tax where deduction not possible),
section 223 (payments treated as earnings: payments on account of director’s tax).'
Her position is not covered by s.18; there is no tax to declare.
Thank you for your support.