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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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Remittance Basis: Identifying Remittances: Condition D: Transitional provisions - arrangements entered into before 6 April 2008

In relation to income and gains for 2007-08 and earlier tax years (pre 6 April 2008 foreign income or gains), certain transitional provisions in Finance Act 2008 mean that references in the legislation to a relevant person are replaced by references to the individual taxpayer.

The two provisions work together to limit the scope of ‘relevant persons’ in the appropriate circumstances.

Paragraph 86(4) Schedule 7 Finance Act 2008

This transitional provision means that where pre 6 April 2008 foreign income or gains are involved, references in Condition D (ITA07/s809L(5)) only applies if the enjoyment of the property or the service provided in the UK by the individual him or herself.

Paragraph 88 Schedule 7 Finance Act 2008

When applying ITA07/s809O to a connected operation in relation to income and gains for 2007-08 and earlier tax years, references in ITA07/s809O to a relevant person RDRM33030 are replaced by references to the individual taxpayer.

This means that a qualifying disposition of foreign income and gains arising or accruing before 6 April 2008 can only be made by the individual, not a relevant person (ITA07/s809O(4)).

Further, it is only the enjoyment of property (or a service) by that individual that is disregarded, and so there is no taxable remittance under Condition D, if there otherwise would be, where the individual’s enjoyment is marginal, or where either full value (an arm’s length amount) is paid for use etc of the ‘property’ or the property is enjoyed on the same terms as by members of the general public (ITA07/s809O(6)).