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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: Introduction to the Remittance Basis: Comparisons with pre-April 2008 regime: Changes to old regime - ceased source

Foreign savings and investment income remitted to the UK in years before 6 April 2008 is not taxed as a remittance if the source of income that gave rise to the income no longer existed at the time that the remittance was made.

Example

Suchet, a non-domiciled individual, who has been UK resident for several years opened a bank account in Switzerland in 1998 and deposited 2,000,000 CHF. Interest arising each year was credited to the account. Suchet did not make any remittances to the UK.

Suchet closed the account on 20 March 2003 and opened a new account in Guernsey into which he transferred the money from the previous account. On 8 April 2003 Suchet remitted £500,000 to the UK from his account in Guernsey. No interest arose on the Guernsey account in the period 20 March 2003 to 8 April 2003.

The account in Switzerland was closed in tax year 2002-03. The remittance was made to the UK in tax year 2003-04 when Suchet no longer owned the source that gave rise to the income (his interest-bearing Swiss account). The amount remitted by Suchet was regarded as capital and was not chargeable as a remittance of income.

From 6 April 2008 remittances of relevant foreign Income whenever it arose (which may include years prior to 2007-08) are chargeable whether or not the source of the income has ceased at the time the income is remitted.

Note - this example ignores any foreign exchange gains/losses; refer to the Capital Gains Manual, CG78300+.