Commentary on Sections Glossary Part 2: Employment income: charge to tax Section 21: Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings
83.This section deals with those earnings that are, under the Schedule E legislation, still within Case I because they are not excepted from it as “foreign emoluments” by the operation of section 192 of ICTA. The label “overseas earnings” replaces “foreign emoluments” to describe earnings for a year in which the employee is resident and ordinarily resident but not domiciled in the United Kingdom that are from an employment with a foreign employer where the duties are all performed outside the United Kingdom.
84.This section derives from section 202A(1) of ICTA and appears as a separate category for the first time here. See Note 8 in Annex 2.
85.Subsection (3) sets out the rule that the receipts basis is not affected by the fact that earnings may relate to a different tax year to that in which they are received or to a year when the employment is not held. It derives from section 202A(2) of ICTA.
86.Subsection (4) is a signpost to section 23 which describes how to calculate the amount of chargeable overseas earnings to be excluded from this section.