Remittance Basis: Accessing the remittance basis: Temporary non-residents and Relevant Foreign Income: Temporary Non Residents: qualifying conditions
The qualifying conditions for temporary non residents who fall within ITTOIA05/s832A(1) are outlined below.
These are that an individual:
- satisfies the residence requirements for the year of return (that is, the tax year of assessment)
- did not satisfy the residence requirements for one or more years immediately before the year of return, but did satisfy the residence requirements for an earlier year
- there are fewer than five tax years between the year of departure and the year of return
- the individual satisfied the residence requirements for at least four out of seven tax years immediately before the year of departure
The residence requirements are satisfied for a tax year, if at any time during that year the individual is either:
- Resident in the UK and not treaty non-resident (see below for meaning of ‘treaty non-resident’)
- Ordinarily resident in the UK, and is not treaty non-resident.
An individual is ’treaty non-resident’ at any time if they are treated as resident in a foreign territory for the purposes of double taxation arrangements (DTAs) within the meaning of ICTA88/s788.
Further details on DTAs are held in the DT digest. The text of each specific DTA is reproduced in the Double Taxation Relief (DTR) manual.
Travis, a long-term UK resident has been a remittance basis user since 2000-01. He leaves the UK for a work secondment in January 2009 (2008-09) and is not resident in 2009-10 and 2010-11.
Travis returns to the UK in August 2011 and meets the residence requirements in s832A in 2011-12.
He has £6,000 of relevant foreign income from 2007-08, a year in which he had claimed the remittance basis under ITA07/s831. He also has £8,000 of relevant foreign income from 2008-09, a year in which he claimed the remittance basis under the new rules at ITA07/s809B.
In 2009-10 and 2010-11 he remits all of this relevant foreign income to the UK to meet certain ongoing UK financial commitments.
Travis will be taxed on £14,000 in 2011-12 (the ‘year of return’) in respect of his remittances of his relevant foreign income in the years of ‘temporary non-residence’.