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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance Basis: Introduction to the Remittance Basis: Foreign Income and Gains: Relevant Foreign Income

Relevant foreign income (RFI) is a general collective term for income that arises from various sources outside the UK, for example: profits from a foreign property business, foreign dividends and foreign interest - refer to ITTOIA05/s830 for full list.

The most common types of RFI, which arise from a source outside the UK, include:

  • Trade Profits - the profits of a trade, profession or vocation carried on wholly outside the UK
  • Profits of a property business where the property is overseas
  • Interest, such as interest paid on a foreign bank account
  • Dividends from Non-UK resident companies, excluding dividends of a capital nature
  • Purchased life annuity payments - annuity payments made under a foreign purchased life annuity; tax is charged on the full amount of payments
  • Profits from deeply discounted securities
  • Proceeds from sale of foreign dividend coupons
  • Royalties and other income from intellectual property
  • Profits from a business which involves films or sound recordings; classed as a ’non-trade business’.

Note on Tax Rates: The ‘starting rate’ for savings income does not apply to income which is relevant foreign income and which is charged on the remittance basis (ITA07/s18(2)).