Sam Yeung is 29 years old and is employed as a financial restructuring specialist at Jets plc, a major investment bank. Jets plc is a large multinational business: its headquarters are in London, United Kingdom (UK).

The bank has offices in Newcastle upon Tyne (UK), Frankfurt (Germany) and Toronto (Canada). Sam works at the Newcastle upon Tyne office, but his role as a financial restructuring specialist requires regular visits to work at Jets plc’s headquarters in London and its offices in Frankfurt and Toronto.

Jets plc have offered Sam the opportunity to lead a project at its office in Toronto. If Sam accepts, he will temporarily relocate to live in Canada from 1 July 2022 to 30 September 2022. Sam thinks that this means that he will become a non-resident individual for UK income tax purposes during the tax year 2022/23.

Sam was born in the UK and has been UK domiciled and UK resident for income tax purposes since birth. His permanent home (a house) is in Durham (UK) and he shares this house with his partner, Kirsten Holberg. Kirsten is 32 years old and was born in Berlin (Germany), but has lived in the UK since she was 11 years old. Kirsten is a PhD student at the University of Durham. During the tax year 2020/21, she had a taxable income of £17,020.

On 6 April 2022, Sam and Kirsten will marry. As a married couple, Sam thinks that he and Kirsten will be subject to a joint assessment of income tax: he believes that marriage will mean that they will cease to be separate taxable persons. He also thinks that he will be able to claim both the Marriage Allowance and the Married Couple’s Allowance.

The following information is relevant for the tax year 2020/21:

1. During the tax year 2020/21, Sam received a gross annual basic salary of £128,400. Income tax of £27,104 was deducted from Sam’s gross annual basic salary using the Pay As You Earn (PAYE) system.

2. Sam’s performance in his role as a financial restructuring specialist was assessed to be ‘superb’ by Jets plc. He received a performance related bonus of £14,000 on 30 September 2020. Income tax of £6,010 was deducted from this bonus using the PAYE system.

3. Jets plc awarded a second performance related bonus of £28,700 to Sam: this amount was received by Sam on 1 June 2021. His contract of employment with Jets plc states that he was contractually entitled to receive the second bonus payment on 31 March 2021. Income tax of £11,032 was deducted from this bonus using the PAYE system.

4. During the tax year 2020/21, Sam received income in the form of interest on a fixed interest savings account of £1,080: this amount was received on 31 December 2020. Sam also received income of £500 in the form of prizes from National Savings Premium Bonds: this amount was received on 31 March 2021.

5. Sam has an Individual Savings Account that is provided by a major retail bank. He received income in the form of interest from this account of £2,010. This amount was received on 31 December 2020.

6. During the tax year 2020/21, Sam donated £2,400 of his income to charity using the Gift Aid scheme.

7. An investment portfolio of shares and bonds in UK companies provided Sam with income of £23,580 during the tax year 2020/21. £15,000 of this relates to income in the form of dividends; £8,580 relates to income in the form of interest income from corporate bonds. The corporate bonds are held in a corporate bonds fund.

8. Sam’s role as a financial restructuring specialist means that he is required to make regular use of computer equipment. Jets plc pays the cost of eye-tests and spectacles for employees who are required to make such use of computer equipment. The cost of Sam’s eye-test and spectacles in 2020/21 was £410.

9. Throughout the tax year 2020/21, Sam was supplied with a car by Jets plc. The car had a diesel-fuelled engine. Sam used the car for both work and private purposes. The car retailed at a list price when new of £39,400 and was first registered on 7 April 2020. Jets plc paid £32,000 for the car, which had an official CO₂ emission rate of 110 grams per kilometre. Sam made a capital contribution of £9,000 towards the cost of the car. All fuel is paid for by Jets plc, including fuel used by Sam for private journeys.

10. Following the announcement of his impending marriage to Kirsten, Jets plc gifted a digital television to Sam. The digital television cost Jets plc £1,599. Jets plc made the gift to Sam in a personal capacity: it was not given due to Sam’s role as a financial restructuring specialist for Jets plc.

11. Jets plc operates an HMRC approved staff suggestion scheme. Awards are made to employees who make suggestions that result in material improvements to the business and the services that the bank provides to its clients. During the tax year 2020/21, Sam was awarded £800 under Jets plc’s staff suggestion scheme.

12. Sam made regular use of gym and leisure facilities provided by Jets plc’s throughout 2020/21. The annual cost per person to Jets plc of the provision of these facilities has been calculated to be £680. The facilities were also available for use by the general public: the annual cost per person for a member of the public to use these facilities is £1,040.

13. Sam made five visits to Jets plc’s headquarters in London during the tax year 2020/21: he was required to make these visits as part of his duties as a financial restructuring specialist for Jets plc. On each occasion, Sam stayed for four nights before returning to Durham. Jets plc paid Sam a personal expenses allowance of £15 per night for each night that he spent in London.

14. During the tax year 2020/21, Jets plc also required Sam to make two visits to their office in Frankfurt and one journey to their office in Toronto. Sam stayed for a total of six nights in Frankfurt and 16 nights in Toronto. Jets plc paid Sam a personal expenses allowance of £35 per night for each night that he spent in Frankfurt and Toronto, respectively. He returned directly to Durham after completing each visit.

Required:

1. Calculate income tax payable or repayable for Sam Yeung for the tax year 2020/21. Items that are non-taxable/exempt from UK income tax should be clearly indicated by the use of zero or noted as ‘exempt’ where appropriate.

2. Critically discuss Sam’s view that, if he relocates to live in Canada from 1 July 2022 to 30 September 2022, he will become a non-resident individual for UK income tax purposes during the tax year 2022/23 (note: assume that the current rules for residence and domicile will apply).

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3. Critically discuss Sam’s view that, as part of a married couple for income tax purposes, he and Kirsten will be subject to a joint assessment of income tax and that he will be able to claim both the Marriage Allowance and the Married Couple’s Allowance.