When are income and gains remitted?

By Tolley

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

When are income and gains remitted?
Outline of the rules on remittances
Definition of relevant person
Remittances in practice
Remittances from mixed funds
Property which is exempt from the remittance rules
Exemption for services relating to property overseas
Payment of the remittance basis charge

This guidance note explains when income or gains are remitted to the UK. It first discusses the general rule, using examples, and then explains the exceptions and exemptions which exist.

An outline of the remittance basis can be found at the Remittance basis – overview guidance note.

This note only discusses the legislation which applies from 6 April 2008, and deals only briefly with transitional rules. For the earlier rules and more on the transitional provisions, see RDRM36000–RDRM36470.

For commentary on the earlier rules, please click here for the pdf extract from Tolley’s Income Tax 2012/13 below:

Click here to view pdf

For simplicity, the foreign exchange implications of foreign currency bank accounts have been ignored in this guidance note and the linked examples. For the interaction between the remittance basis and foreign bank accounts, see the Remittance basis and foreign currency bank accounts guidance note.

Outline of the rules on remittances

The rules on remittances are very wide. In outline, there is a remittance if any property consisting of, representing, or derived from foreign income or foreign chargeable gains is:

•brought to, received, or used in the UK for the benefit of a ‘relevant person’ (see below). Note that this is not limited to property sold in the UK as was the case under the earlier rules. For the transitional legislation, see FA 2008, Sch 7, para 86(1), (3) and RDRM31470
•used to provide a service in the UK to or for the benefit of a relevant person, irrespective of whether payment is made in the UK or offshore
•used in connection with a loan or debt to provide a UK person with a UK benefit. The legislation calls this a ‘relevant debt’ (see RDRM33040). The