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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance Basis: Accessing the remittance basis: Exceptions to the claim requirements: Below £2,000 threshold users: Years of arrival and departure - interaction with Extra Statutory Concession (ESC) A11

ESC A11 may apply to an individual for the year in which they arrive or leave the UK; it effectively splits the tax year into periods of residence and non-residence and computes liability accordingly. This generally means that foreign income from the period of ‘non-residence’ is not subject to UK tax.

However in considering whether the ‘below £2,000 threshold’ RDRM32110 limit applies in respect of use of the remittance basis of taxation under ITA07/s809D, the level of un-remitted foreign income and gains for the entire tax year must be taken into account.


Ferdinand enters the UK on 20 October 2010, and he is resident for the tax year 2010-11. He claims split-year treatment under ESC A11.

Ferdinand has foreign bank interest (relevant foreign income) for the period 6 April to 19 October 2010 totalling £2,200. He has further bank interest of £1,300 arising between 20 October 2010 and 5 April 2011. He remits £1,000 to the UK in that year.

At the end of the year his total un-remitted foreign income is £2,500; note that even though he has claimed split-year treatment for 2010-11, he still has to include any foreign income that arose before he entered the UK.

As Ferdinand’s un-remitted foreign income is above the threshold he cannot use the remittance basis under s809D. If he wishes to use the remittance basis he will need to claim under ITA07/s809B, and will lose his personal allowances and the annual exempt amount.

Note: Assuming the temporary non-resident rules do not apply RDRM32500 remittances of foreign income arising in the period before an individual came to the UK, that is the period 6 April 2010-19 October 2010 in the above example will not be taxable under the terms of ESC A11. Foreign income arising from a tax year when the individual was not resident in the UK at all during the year is also not taxed when brought into the UK.