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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

HM Revenue & Customs
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Remittance Basis: Introduction to the Remittance Basis: Overview of the Remittance Basis regime: What income and gains does the remittance basis apply to?

For individuals who are Not Ordinarily Resident (NOR), the remittance basis only applies to foreign income.

It applies to both foreign income and foreign capital gains for individuals who are not domiciled within the UK (ND).

There is a key difference between NORs and NDs in respect of capital gains. Any capital gains arising to individuals who are domiciled within the UK but are NOR cannot be taxed on the remittance basis, even if the individual uses the remittance basis in respect of their foreign income.

Note: An individual who is UK domiciled but NOR and who claims the remittance basis still loses their capital gains Annual Exempt Amount. (refer to RDRM32040).

There are also differences in what is classified as ‘relevant foreign earnings’ depending on whether the employees is NOR or ND. These are discussed at RDRM31120 - also refer to the Employment Income Manual EIM40001 onwards.

Finally, there are some differences in the treatment of foreign income on the remittance basis, depending on whether it is foreign employment income or other types of income (referred to collectively as Relevant Foreign Income RDRM31140). This applies especially in the application of certain exemption provisions, so it is important that the nature of the foreign income is identified.

For further information on all of these provisions refer to the relevant subject headings in RDRM31000.