Commentary on Sections Glossary Part 2: Employment income: charge to tax Section 34: Earnings remitted to the UK: further provisions about UK-linked debts
130.This section contains more provisions about UK-linked debts.
131.Subsection (2) sets out the rules for determining when a person, defined as the “borrower”, will be treated for the purposes of the section as using the earnings towards satisfying a debt. Two conditions must be met, Conditions A and B.
132.Condition A is that the earnings are so dealt with that the lender holds money or property representing the earnings in such a way that the money or property is available to the lender to satisfy, or reduce, the debt. This is set out in subsection (3).
133.Subsection (4) sets out Condition B, that there is an arrangement between borrower and lender such that the quantum of the outstanding debt or the timing of the repayment of the debt depends on the amount or value the lender holds as mentioned in subsection (3).
134.Subsection (5) explains when a debt for money lent can be treated as incurred towards satisfying another debt.
135.Subsection (6) extends the meaning of lender to include any person for the time being entitled to repayment and subsection (7) extends the meaning of “satisfy” (also for the purposes of section 33) to mean satisfy wholly or in part.