HMRC have recently published some clarification about the extent of Extra Statutory Concession A11, which deals with split-year treatment for tax residence. They say that this concession is likely to be replaced because of the possibility of a statutory residence test. However, to cover the period while this concession remains in place, HMRC thought it would be helpful to clarify their position, because there has apparently been some uncertainty about whether the concession applies to employment income relating to securities in Part 7 ITEPA 2003.

HMRC confirm that they do not consider that the concession applies to such income in the year of arrival but, as there has been some uncertainty about the matter, for all open years and until a statutory basis is introduced, HMRC will accept that the concession applies in the year of arrival.

As far as the year of departure is concerned, the concession does not apply where a charge arises in respect of securities acquired for less than market value. However, HMRC say that a concession does not apply to anything else in Part 7 either. Even so, to avoid any misunderstanding, for all open years and until a statutory basis is introduced, HMRC will accept that Concession A11 applies in the year of departure – except where the charge arises from securities acquired for less than market value.