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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

HM Revenue & Customs
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Remittance basis: accessing the remittance basis: remittance basis charge - nomination of foreign income and gains: example - insufficient nomination

Isabella is a non-domiciled long-term UK resident who has claimed the remittance basis for 2010-11. She has £80,000 of UK employment income, and her un-remitted foreign income and foreign gains for the year are as follows:

Relevant foreign income - bank interest £45,000
Foreign employment income £5,000
Foreign capital gains £190,000

Isabella pays tax at a 40% tax rate on her nominated income and 18% on her nominated foreign gain. Nominated income and gains are taxed as if the remittance basis did not apply to them (ITA07/s809H(2)). Isabella chooses to nominate £35,000 of her foreign gains, and £40,000 of her bank interest (RFI), which creates a relevant tax increase of only £22,300

Under section 809H(4) a further £19,2501 of foreign income is treated as having been nominated, to create a further £7,700 of income tax due.

  Calculation (a)     Calculation (b)    
Non-savings income            
20% on £34,800 = £6,960 £34,800 = £6,960
40% on £45,200 = £18,080 £45,200 = £18,080
  £80,000   £25,040 £80,000   £25,040
Savings income            
40% on nominated RFI £40,000 = £16,000      
40% (2) on foreign income(1) nominated under s809H(4) £19,250 = £7,700      
Capital Gains            
18% on nominated CG (4) £35,000 = £6,300      
Total Income Tax and CGT Due     £55,040 (3)     £25,040 (3)
Relevant Tax Increase ** is Total (a) £55,040
  less Total (b) £25,040
  Total   £30,000


  1. Section 809H(4) only allows an amount to be treated as foreign income, not capital gains, regardless of whether the individual has sufficient income to have made such a nomination. The actual composition of their offshore portfolio or their own nominations is irrelevant.
  2. Income merely treated as nominated will be taxed at the prevailing higher rate for employment/savings income, but it is not necessary to determine its precise nature.
  3. As a remittance basis user, Isabella has no personal allowances due.
  4. Rates used here for the purposes of this example only; use the rates applying in the relevant tax year.

Also refer to RDRM35100: remittances of nominated income or gains for details about the rules that may apply if Isabella remits any of her nominated income or gains in later years