RFIG45200 | FIG regime: Disqualified income

From HM Revenue & Customs · Residence and FIG Regime Manual

Definition of disqualified income

Section 845I ITTOIA 2005

Foreign income is not ‘qualifying foreign income’ (see RFIG45100) if it is ‘disqualified income’. Relief cannot be claimed under the FIG regime for any amount of disqualified income, so those amounts are taxed when they arise.

Income is disqualified income if it is:

certain income arising under the settlements legislation – see RFIG45300
income from a security treated as situated in the UK where there has been a share exchange involving a non-UK incorporated close company – see section 138ZB TCGA 1992 and CG52637
transferred income streams treated as income – see section 809AZB ITA 2007 and BLM01035
performance income – see below
certain types of pension income – see below

Performance income

Section 845J ITTOIA 2005

For the purposes of disqualified income, ‘performance income’ is any income chargeable to Income Tax that results, directly or indirectly, from the performance of a ‘relevant activity’ by an entertainer or sportsperson, whether performed in the UK or overseas. This includes payments or distributions to or by personal service companies.

A ‘relevant activity’ is:

giving a performance of entertainment or sport – this includes a performance which is, or may be, made available to the public, regardless of whether anyone has paid to see the performance
participation in any sound or video recording
any activity in connection with a commercial occasion or event, including making an appearance

Performances can be solo or involving other performers.

A commercial occasion or event includes an occasion or event for which any person might receive or become entitled to payment (of cash or other property) as a result of anything done by the entertainer or sportsperson, or which is designed to promote commercial sales or activity by advertising, the endorsement of goods or services, sponsorship, or other promotional means.

Pension income

The following types of pension income are disqualified income:

income from a pre-1973 pension paid under the Overseas Pensions Act 1973 – see section 629 ITEPA 2003 and EIM75500
a payment made to, or in respect of, a relieved member or transfer member of a relevant non-UK scheme (RNUKS) to which the member payment provisions apply – see Schedule 34 to FA 2004 and PTM113200