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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 - claims mechanism

For years before 2008-09 the ITTOIA 2005 legislation allowed relevant foreign income RDRM31140 arising in one tax year to be remitted tax free in the following year by claiming the remittance basis in the first year but not the second year.


Rollo claimed the remittance basis in respect of his relevant foreign income for year 2004-05. He did not remit any of it to the UK in the year and consequently was not liable to UK tax on it for that year.

Rollo did not claim or use the remittance basis in respect of any of his foreign income or gains for tax year 2005-06. He remitted all his relevant foreign income that arose during 2004-05 to the UK on 31 December 2005.

As Rollo did not claim the remittance basis of taxation for 2005-06 he was chargeable on the arising basis for that year. He was therefore only chargeable on relevant foreign income arising in that year and not the income remitted in the year that arose in 2004-05.

Following Finance Act 2008 relevant foreign income that arose in a year in which the remittance basis was claimed is taxable whenever it is remitted, regardless of whether the individual has chosen to use the remittance basis in the year of remittance or not.

So in the example above if Rollo remitted his relevant foreign income from 2004-05 in the tax year 2008-09 but he did not use the remittance basis in 2008-09, there would still be a taxable remittance. This may be subject to certain transitional provisions RDRM31400 covering the change to the new Chapter A1 rules from 2008-09.