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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Remittance basis: mixed funds: introduction

A fund, such as a bank account, that is maintained abroad may receive deposits from a variety of different sources any of which may be subject to foreign tax. For example there may be

  • Employment income
  • Relevant foreign income (such as trade profits and investment income)
  • Foreign chargeable gains
  • Other forms of income or capital

Proceeds received from the disposal of a chargeable asset will include a return of some or all of the capital cost of the asset and may also include an element of gain. If a non-UK asset costing £500 is sold for £400, all of the proceeds represent a return of capital and the sum is not itself a mixed fund. There is no gain capable of being remitted to the UK. (For an introduction to the possible treatment of the loss, see CG25330 above.) If the sale proceeds are £650, £500 represents capital and £150 represents a gain. The proceeds arise from two sources and therefore constitute a mixed fund in their own right.

A mixed fund is defined as money or other property which contains or derives from more than one kind of income and capital, or contains or derives from income or capital for more than one tax year.


Seamus (who uses the remittance basis in all years) sells some shares in Medecins de France SA in 2008-09 for €100,000 and realises a loss of £5,000. He pays the proceeds into a newly-opened French bank account. The account is not a mixed fund because it contains only capital. He does not make any withdrawals from the account.

In 2010-11 Seamus sells more shares in Medecins de France SA for €170,000 and realises a gain of £12,000. He pays the proceeds into the same bank account. The account is now a mixed fund because the money in it derives both from capital and from foreign chargeable gains.

The account now contains €270,000 and in 2011-12 Seamus brings €135,000 into the United Kingdom. The question arises of how much of his foreign chargeable gain has been remitted.