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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: Transitional Provisions: Overview of Transitional Provisions

The remittance basis rules at Chapter A1, Part 14 of ITA 2007 apply from 6 April 2008, for tax years 2008-09 and later. Different rules applied to the taxation of foreign income and gains on the remittance basis for tax years up to and including 2007-08.

Therefore a number of transitional provisions were introduced to deal with the switch from the previous rules to the new rules. These are contained in paragraphs 82 to 91 of Schedule 7 to the Finance Act 2008.

These transitional provisions cover the following areas:

  • The treatment of general earnings, relevant foreign income and foreign capital gains arising or accruing for tax years up to and including 2007-08, which were subject to the previous remittance basis rules. Such foreign income and gains are brought into the rules at Chapter A1, subject to these transitional limitations.

(Paragraphs 82 to 84)

  • Income and gains arising or accruing for tax years up to and including 2007-08 are taken into account when they are remitted in calculating whether the remittance basis is due without claim under section ITA07/s809E.

(Paragraph 85)

  • Limiting the effects of the new rules by preventing retrospection in the application of the rules to relevant foreign income that arose prior to 2008-09.

(Paragraph 86)

  • Limiting the application of the new rules in respect of relevant persons in Conditions A to D of section 809L, and mixed funds, in relation to the foreign income and gains arising or accruing for tax years up to and including 2007-08 (Paragraphs 86 to 89).
  • Exemption from the ‘relevant debt’ rules in s809L for interest paid using relevant foreign income in respect of loans obtained outside the UK for the purpose of acquiring an interest in residential property in the UK, where the money was lent before 12 March 2008 and the interest acquired before 6 April 2008.

(Paragraph 90)

  • Extended time limit for claims to be made under section 431 ITEPA 2003 for employment-related securities acquired between 6 April 2008 and 31 July 2008

(Paragraph 91).

For further details on each provision see the relevant page (following) detailing each transition. In cases of doubt or difficulty please refer to the Specialist Personal Tax, PTI Advisory - Remittance Basis Technical Team