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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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HM Revenue & Customs
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Remittance Basis: About the Remittance Basis Chapters

Introduction

This manual does not attempt to reproduce material that is found in other manuals or information sources. Instead its purpose is to explain the remittance rules introduced by Finance Act 2008.

More guidance will be produced over the coming months regarding various aspects of the new rules introduced by Finance Act 2008. In particular, it is envisaged that extra examples will be added to illustrate the working of the rules in less straightforward circumstances.

The Remittance Basis and Finance Act 2008

The remittance basis has been available for many years, first appearing in tax legislation over 200 years ago. In more recent years it has largely applied to the taxation of foreign income and gains arising to UK residents who are either Not Ordinarily Resident and/or Not Domiciled within the UK, but there were some differences between the treatment for foreign income arising from employment and that arising from investments, and between the availability of the remittance basis in respect of capital gains (restricted to non-domiciled individuals only).

Finance Act 2008 Schedule 7 introduced new rules at Chapter A1 Part 14 of ITA 2007 about the remittance basis. These apply with effect from 6 April 2008, and this manual describes the law as it applies to 2008-09 and later years.

There are certain transitional provisions that deal with foreign income and gains arising in years prior to 2008-09 and remitted in 2008-09 or later, which are covered in this manual.

For the treatment of remittances and remittance basis users in tax years prior to 2008-09 please refer to the relevant guidance in the employment income manual, savings and investment manual or capital gains manual as appropriate. If you are dealing with any year before 2008-09 you must use the guidance in these manuals and not just the guidance in this manual.

Please note that the remittance basis regime rules introduced by Finance Act 2008 are complex in parts. Many sections of Chapter A1 Part 14 ITA 2007 interact with each other, and with other Taxes Acts. We have endeavoured to note and provide links to pages or other guidance manuals where possible. It is strongly advised that you do not simply ‘dip’ into pages of this section without reading and understanding the broader context from the surrounding pages and links.

If you need any further assistance in the application of the new or the old rules to a particular situation please contact Specialist Personal Tax, PTI Advisory, Foreign Income and Remittance Basis Team.