The remittance basis and foreign currency bank accounts
Information on how HM Revenue and Customs has been exploring ways to minimise administrative issues when dealing with self assesment returns and overseas bank accounts.
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One of the main features of the remittance basis regime introduced in Finance Act 2008 is that those who choose to be taxed on the remittance basis will no longer qualify for the Annual Exempt Amount (AEA) for Capital Gains Tax. A number of concerns have been expressed that this is causing significant administrative difficulties in completing Self Assessment returns because of the need to establish the gains and losses which arise on movements from overseas bank accounts held in currencies other than sterling. This is because such accounts are chargeable assets for the purposes of Capital Gains Tax and any transfers between them create a potentially taxable disposal.