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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

HM Revenue & Customs
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Remittance Basis: Identifying Remittances: Condition D: Connected operation - involvement of a relevant person

Condition D cannot apply where the property which is used for the enjoyment of a relevant person in the UK is that of a relevant person RDRM33030.

The question of whether someone whose property is used in this way is a relevant person is determined by reference to the date on which the remittance takes place (ITA07/s809O(2)).

Example 1

Janet, a remittance basis user, owns a foreign yacht which she bought using her foreign income and gains. On 2 March, unable to afford the mooring fees, she disposes of the yacht to a non-resident company for less than a third of its cost and less than its current value.

John has a controlling interest in that non-resident company. John also personally owns a country estate in Cornwall. In October, he allows Janet to use the country estate rent-free.

Condition D seems to be met because property is used in the UK by a relevant person in circumstances where there is a connected operation. However in July Janet and John got married following a whirlwind romance (having not previously lived together). On that date, John becomes a relevant person so Condition D can no longer apply.