person to have been resident and ordinarily resident in the United Kingdom throughout the "qualifying period".
4. The Revenue will apply this new interpretation of the law with effect from 6 April 1992. Anyone who becomes resident and ordinarily resident in the United Kingdom on or after that date will be subject to the new practice. They will not therefore be able to count a preceding period abroad, during which they were not resident, towards a "qualifying period" for the purposes of the 100 per cent foreign earnings deduction. The new practice will not apply to people who became resident and ordinarily resident before 6 April 1992. They will continue to be able to utilise a period of non-residence in the United Kingdom towards establishing a "qualifying period", until the benefit of the period of non-residence runs out.
Terminal leave pay
5. This change also affects the tax treatment of pay for a period of leave in the United Kingdom following a period of non-residence. Where pay is for a period of terminal leave during which the individual is resident and ordinarily resident in the United Kingdom, liability arises under Case I of Schedule E. If this follows a period of non-residence the foreign earnings deduction cannot apply under the new practice.
6. Where however terminal leave follows a period abroad during which someone has remained resident and ordinarily resident, Paragraph 3(3) Schedule 12 ICTA 1988 allows earnings attributable to the "qualifying period" to include any pay for that employment which relates to a period of leave immediately following the "qualifying period" in the same tax year.
THIS STATEMENT HAS NO BINDING FORCE AND DOES NOT AFFECT A TAXPAYER'S RIGHTS OF APPEAL ON POINTS CONCERNING HIS LIABILITY TO TAX
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