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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: Relevant persons and foreign income and gains arising before 6 April 2008

Paragraph 86(1) and (4) Schedule 7 Finance Act 2008


The introduction of Chapter A1 Part 14 ITA 2007 has extended the meaning and scope of foreign income and gains that become taxable when remitted to the UK. One change is the introduction of the concept of ‘relevant person’RDRM33030 at section 809L which, broadly, provides that a taxable remittance will occur when foreign income or gains are brought into or otherwise used in the UK by relevant persons other than the individual himself or herself.


The transitional rule provides that in establishing whether there has been a remittance of an individual’s income and gains for 2007-08 or any earlier year Conditions A and B, Condition C and Condition D at ITA07/s809L (refer to RDRM33000) are applied as if references to ‘relevant person’ are to the individual.


This means that the income or gains remitted either as cash or property have to be brought to, received by or used in the UK for the benefit of the individual concerned before there can be a remittance.


Sanjay is a non-domiciled remittance basis user who transferred £10,000 of his foreign employment income from 2007-08 to his 15 year old grandchild’s offshore bank account. In 2008-09 the grandchild then remits £3,000 of this to the UK to buy himself a new computer. Under the rules at section 809L this would create a taxable remittance of £3,000 by Sanjay because his grandson is a relevant person. However the transitional rule means that there is no taxable remittance of this income because it is employment income from 2007-08.

Note: The exclusion of ‘relevant persons’ from s809L for pre 6 April 2008 income and gains does not apply in considering the other transitional rules in relation to the remittance of relevant foreign income (refer to RDRM31140 Relevant foreign income).