Business investment relief ― clawback of exemption

Individuals who are not domiciled or deemed domiciled in the UK can bring foreign income and capital gains into the UK for the purposes of investment in UK companies without triggering a remittance. This is known as ‘business investment relief’. For more on the remittance basis, see the Remittance basis ― overview guidance note.

To be a qualifying investment, the company must be a private limited company whose shares are not traded on a recognised stock exchange.

The investment must be made within 45 days of the date the funds are brought into the UK.

For further information, see the Business investment relief ― qualifying investments guidance note. You are recommended to read that guidance note first before continuing.

The funds will become a chargeable remittance if there is a ‘potentially chargeable event’, such as the sale of the shares or if the company ceases to trade. If this event occurs, the taxpayer has a grace period (which varies depending on the type of event) to take the funds out of the UK or reinvest them in another qualifying investment to avoid a remittance.

These provisions apply where the funds are brought into the UK or the investment is made on or after 6 April 2012.

Following a consultation  in 2016, changes were introduced to the regime that apply where the funds are brought into the UK (or the investment is made) on or after 6 April 2017. The changes are designed to increase take-up of the relief and stimulate more investment into the UK. This guidance note has been updated to take account of the revised rules.