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This is a practice that developed historically for high-earning
UK resident but non-UK domiciled employees working partly in the UK
and partly abroad. They would enter into dual employment
- one with an overseas employer covering non-UK employment
- another with a UK employer (within the same group) covering UK
Overseas earnings under the non-UK employment contract would be
outside the scope of UK taxation unless remitted to the UK because
the employee would be taxed under the more favourable ‘remittance basis’.
Following growing scepticism and concerns about this tax
advantage and possible artificiality of dual contracts
arrangements, rule changes were introduced from 6 April 2014 which
restricted the availability of the remittance basis. Ever since,
overseas’ earnings under a non-UK employment contract are
subject to UK income tax as they arise if certain conditions are
present, including (a) the UK employer and foreign employer being
the same or ،ociated and (b) the UK and foreign employments are
Such restrictions do not, ،wever, remove the availability of
‘Overseas Workday Relief’ to protect overseas’ earnings
from UK taxation for the first three years of UK tax residence.
Dual contracts have therefore become less popular over the years,
but they can still be appropriate in the right cir،stances.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.
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