The 2014 Finance
Bill will address the perceived abuse by high-earning non-domiciled
individuals manipulating duties of a single employment between offshore and
UK duties by the use of dual contracts.
Where tax
is not payable on the overseas contract at a rate broadly equivalent to the
individual’s UK tax rate, then the overseas employment income will be taxed on
the arising basis in the UK. However the legislation has been revised to
prevent a tax charge arising on dual contracts which are not motivated by tax
avoidance.
No income tax charge will arise on income from
employment duties performed in tax years up to 2014/15. Furthermore, no charge will arise on directors
with less than a 5% shareholding in the employing company or on employments
held for legal or regulatory reasons.
These
changes will take effect from 6 April 2014.