The remittance basis—relevant persons
Produced in partnership with Clare Ludlam and Nick Warr of Taylor Wessing LLP
The remittance basis—relevant persons

The following Private Client guidance note Produced in partnership with Clare Ludlam and Nick Warr of Taylor Wessing LLP provides comprehensive and up to date legal information covering:

  • The remittance basis—relevant persons
  • Definition of ‘relevant person’
  • Husband, wife and civil partner
  • Other individuals
  • Settlements
  • Beneficiaries
  • Companies
  • Partnerships
  • Persons that are not relevant persons
  • Practical applications

To determine whether a remittance has occurred for the purposes of the remittance basis of taxation, reference must be made to the Conditions set out in section 809L of the Income Tax Act 2007 (ITA 2007). This introduces four condition clauses: Conditions A and B, which are taken together, and Conditions C and D which stand alone. See Practice Note: The meaning of remittance and eligibility for the remittance basis—The definition.

The occasions of remittance prescribed by Conditions A and B and Conditions C and D are expressed in terms of a 'relevant person'.

The use of the relevant person definition in determining occasions of remittance means that remittances can be triggered not only by the taxpayer but by any other relevant person.

HMRC's view on this is that 'This broader definition aims to prevent individuals using family members or other close associates or entities, to make or receive remittances (as defined at Conditions A to D) of their foreign income or gains and then avoiding UK tax by claiming it is no longer 'their' income or gains that has been remitted or that it is not them who have made or benefited from the remittance'.

This Practice Note considers the meaning of 'relevant person' in this context. For an introduction to the remittance basis of taxation, see Practice Note: The remittance basis—summary.