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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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Remittance basis: accessing the remittance basis: remittance basis charge - nomination of foreign income and gains: insufficient nomination - automatic additional nomination of income under ITA07s809H(4)

Long-term residents RDRM32200 subject to the remittance basis charge must include a nomination of their foreign income and gains in order to validate their claim to the remittance basis (ITA07/s809C(2)). The minimum amount that can be nominated is £1 of foreign income or gains (as appropriate).

The term ‘insufficient nomination’ is not within the legislation itself, but has been coined by HMRC to describe the situation when an individual who is liable to pay the remittance basis charge has not nominated enough of their foreign income or gains on their SA return to produce either the £30,000 or the £50,000 charge.

The legislation requires, the relevant tax increase (see RDRM32330) and thus the remittance basis charge to always total either £30,000 or £50,000. In cases of an insufficient nomination, this is achieved by ITA07/s809H(4) which effectively deems sufficient foreign income to be to be added to the actually nominated foreign income or gains to ensure the charge equals either £30,000 or £50,000 as applicable.

Nominated amounts that are increased by ITA07/s809H(4) are always income, not capital gains, so the legislation can only ever produce income tax. This is regardless of the nature of any nominations made by the individual themselves, or the composition of their offshore portfolio. Refer to RDRM32370.