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Non-residents and disregarded income

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Summary

Where an individual is not resident in the UK, the 'excluded income' provisions may prove to be more beneficial than personal allowances.

Description

Non-residents and disregarded income

Cause

Background information

Section 811 of Income Tax Act 2007 limits the extent to which a non-resident is liable to UK Income Tax.

It does this by comparing the taxpayer's liability, as it would normally be calculated, with an alternative calculation in which the taxpayer is denied personal allowances, but has certain types of income ignored, or 'excluded’.

If this alternative calculation produces a lower UK tax liability than the normal calculation, then the taxpayer’s liability is restricted to this lower amount.

Resolution

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