Remittance basis – exempt property

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Remittance basis – exempt property
  • Outline of the rules
  • Public access rule
  • Personal use rule
  • Repair rule
  • Temporary importation rule
  • Notional remitted amount less than £1,000
  • Sales of exempt property
  • Exemption for investment in UK business

The rules on when income and gains are remitted to the UK are explained in the When are income and gains remitted? guidance note, and you are advised to read that note first. An outline of the remittance basis can be found in the Remittance basis – overview guidance note.

The normal rule is that property brought to, or used in the UK, by or for the benefit of a relevant person is a taxable remittance, if it has been purchased out of (or derived from) relevant foreign income / gains.

ITA 2007, s 809L

However there are a number of exceptions to this general rule so that certain property can be remitted to the UK without attracting a tax charge under the remittance basis rules.

Outline of the rules

Exempt property is divided into five categories, each of which is discussed further below:

  • property that meets the public access rule
  • clothing, footwear, jewellery and watches which meet the personal use rule
  • property of any description which meets the repair rule
  • property of any description which meets the temporary importation rule
  • property where the notional remitted amount is less than £1,000

ITA 2007, s 809X

From 6 April 2012, exempt property can be sold in the UK without attracting a tax charge as long as the proceeds are taken back offshore or reinvested in a qualifying UK company within a limited period of time (see below). Sales of exempt property in the UK prior to 6 April 2012 did constitute a remittance.

From 6 April 2013, exempt property which is lost, stolen or destroyed is not treated as being in the UK from the date on which the loss etc occurs, to the date

More on Remittance rules: