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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance basis: accessing the remittance basis: remittance basis charge - nomination of foreign income and gains: payments on account - interaction with the remittance basis charge (RBC)

The remittance basis charge is tax on nominated income or nominated gains, (or a mixture of the two), made by the individual (refer to RDRM32320: ‘Making a nomination’). It can also be affected by the operation of the legislation at ITA07/s809H(4) (refer to RDRM32360: ‘Insufficient nomination’).

Note: the £30,000 or £50,000 remittance basis charge is due in addition to any tax due on UK-source income or gains or any foreign source income and gains remitted to the UK in the year..

To the extent that the remittance basis charge consists of income tax, the payment on account position for those paying the charge is the same as that for any other SA taxpayer. This means their payments on account are based on their income tax liability for the previous year (TMA1970/s59A(1)).

The SA109 ‘Residence, remittance basis etc’ supplementary pages to the SA tax return must be completed to both claim the remittance basis and nominate income or gains and pay the remittance basis charge. Refer to RDRM32380 ‘Completing the SA Return’.

Effect and treatment of income

If paying part or all of the remittance basis charge in respect of nominated income, then income tax will be due. The amount which has been nominated from income and produced income tax will need to be taken into account and included in the overall calculation of payments on account for the following year.

If an insufficient nomination RDRM32360 is made to produce the remittance basis charge of either £30,000 or £50,000 (ITA07/s809H(4)) the additional amount treated as nominated will always produce income tax. This also has a bearing on the payments on account position, even though the additional nominated amount is from an unidentified and unspecified amount of income. The additional amount nominated from income will automatically produce income tax that will become part of the individual’s payment on account calculation for the following year.

Effect and treatment of capital gains

Capital gains tax is not included in computing payments on account, so any of the remittance basis charge that is constituted of nominated capital gains tax will not form any part of the following year’s payments on account. Refer to RDRM32400 Payments on account - nominations involving chargeable gains.


Ricardo, a non-domiciled long-term resident has an income tax liability of £200,000 for tax year 2007-08. Subsequently he makes payments of £100,000 on 31 January 2009 and on 31 July 2009 on account of his liability for 2008-09.

His tax liability for 2008-09 is £250,000 which includes for the first time the £30,000 remittance basis charge. The remaining £220,000 is income tax on UK sources. Ricardo nominated only £21,000 of his foreign income which led to a charge of £8,400 income tax; he also nominated £120,000 foreign chargeable gains which led to a capital gains tax of charge £21,600. Together these amounts make up his £30,000 remittance basis tax charge.

Ricardo’s payments on account for 2009-10 will be calculated using the £220,000 income tax paid on UK income sources in 2008-09, plus the £8,400 income tax element of the remittance basis charge. This means that he will make payments on account of £114,200 on 31 January 2010 and on 31 July 2010 on account of liability for 2009-10.

Remittance basis charge - exempt remittance

Where the individual pays either the £30,000 or the £50,000 remittance basis charge directly to HMRC from his foreign bank account, the payment of either the £30,000 or the £50,000 may be regarded as an exempt remittance (ITA07/s809V). This exemption applies to any part of the payment on account that is attributable to the charge for the tax year. Refer to RDRM34020 ‘Remittance basis charge - money paid directly to HMRC’ for details.