Who can access the remittance basis (2013/14 onwards)?

By Tolley

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

  • Who can access the remittance basis (2013/14 onwards)?
  • The remittance basis and non-domiciliaries
  • The remittance basis and those not ordinarily resident
  • Anti-avoidance ― meaning of temporary non-residence
  • Temporary non-residence ― impact on remittance of relevant foreign income
  • Temporary non-residence ― impact on remittance of foreign capital gains

The rules on remittance changed:

  • from 6 April 2008, when it became both more complex and more expensive to utilise the remittance basis
  • from 6 April 2013, as the abolition of the concept of ordinary residence meant that certain people who had been able to use the remittance basis were no longer able to do so (subject to transitional rules)
  • from 6 April 2017, when the concept of deemed domicile was introduced for income tax and capital gains tax

Most people in the UK are taxable on their worldwide income and capital gains on an arising basis. This means that income is taxable when it is paid to the individual or put at his disposal, for instance, by being credited to a bank account. Gains are usually taxable when the disposal occurs. If the individual is taxable on the arising basis, he must declare all his overseas income and gains in the tax year in which it arises, even if it is not brought into the UK.

Dewar v IRC 19 TC 561 (subscription sensitive)

However, certain individuals are taxable in the UK on their UK income and gains alone, and pay UK tax on foreign income and gains only if these are remitted (brought) to the UK. This is the remittance basis of taxation. The following people qualify for the remittance basis:

  • UK residents and non-domiciliaries (these people have always been able to access the remittance basis) *
  • UK residents and those not ordinarily resident (up to 5 April 2013, although these people might have been able to continue to access the remittance basis in 2013/14 to 2015/16 under transitional rules)

More on Remittance rules: