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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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

For years before 2008-09 it was possible to make a gift outside the UK of foreign income or gains to a third party, such as, for example to a close relative or non resident trust; this was sometimes referred to as ‘offshore alienation’.

Those foreign income and gains could then sometimes be brought to the UK in such a way that the individual to whom the income and gains originally belonged had the benefit, use or enjoyment of them in the UK, without attracting a UK tax charge.


Before 5 April 2008 Shahina, who is resident but not domiciled in the UK settled £5,000,000, consisting of her foreign capital gains into a Jersey resident trust. The trustees of that trust then acquired a property in London for £2,000,000 in which Shahina lives rent free.

For years before 2008-09 this would not be a taxable remittance to the UK by Shahina and would not therefore attract a charge to tax.

From 6 April 2008, where an individual’s foreign income or gains are brought into the UK, or property is used or, services and benefits are provided in the UK by or for the benefit of individual and/or a relevant person there is a taxable remittance on the individual (subject to certain transitional provisions RDRM31400 covering the change to the new Chapter A1 rules).

The definition of ‘relevant person’ is wide but includes the individual, their spouse or civil partner, and their children and grandchildren under 18. Refer to RDRM33030: relevant person definition.