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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance basis: exemptions: remittance basis charge - money paid directly to HMRC

Money brought into the UK to pay the remittance basis charge (see RDRM32210) is treated as not remitted to the UK if direct payment is made to HMRC (ITA07/s809V). This exemption will only apply if the money is paid:

  • in respect of the tax due for the year in which the remittance basis has been claimed,


  • the remittance basis charge is due for that tax year.

Only remittances that relate to the remittance basis charge are covered by the exemption. Remittances of foreign income or gains to pay any other liability to UK tax, including for example income tax or capital gains tax on remitted amounts, are themselves chargeable to UK tax as remitted income or gains of the tax year in which the tax is paid to HMRC (although see also RDRM35140 - remittances of nominated income). This includes payments to settle enquiry cases by contract settlement except to the extent of any payments of the remittance basis charge included in the contract settlement (but not any interest or penalties on those amounts).

The remittance basis charge can be paid in one or more amounts. However, the amount that benefits from the exemption provided at s809V is limited to the amount of the charge - that is either £30,000 or £50,000. The amount due can be paid in one lump sum or in several stages, and may form part of the payments on account paid on 31 January or 31 July, or may be paid as a balancing payment. The exemption applies as long as the payment is in relation to the tax year in which the remittance basis charge is due.

The exemption only applies where the remittance basis charge is paid directly from foreign income or gains held outside the UK, the payment must be made direct to HMRC. This can be done either by:

cheque (drawn on a foreign bank account)

electronic transfer of funds.

Taxpayers will need to keep sufficient records to show that payment of the £30,000, or £50,000 remittance basis charge was made directly to HMRC from an overseas account. A copy of a cheque (or cheques) drawn on the foreign bank account, or the relevant bank statement identifying the bank transfer are examples of acceptable evidence.


Alex is a long-term UK resident remittance basis taxpayer. He uses the remittance basis in 2008-09 and plans to use it again in 2009-10. Alex therefore makes payments on account (see RDRM32390) of £100,000 on 31 January 2009 and on 31 July 2009 in respect of his 2009-10 liability.

In July 2009 he pays £40,000 of that payment on account from his 2008-09 foreign income. Payment is made by cheque drawn on an account at a bank in the Isle of Man that was sent direct to HMRC.

Alex’s tax liability for 2009-10 is £200,000 including the remittance basis charge of £30,000, which has been wholly met from the payments on account that he has made. No further tax is due for this year.

Because £40,000 of the tax that Alex has paid on account was paid directly to HMRC from an overseas account, £30,000 of the £40,000 income remitted may be treated as not remitted to the UK and is not chargeable to tax, unless Alex has instructed otherwise. The remaining £10,000 will be taxed as a remittance in the normal way. As it was remitted in July 2009 it will be a taxable remittance for the tax year 2009-10, and should be declared as such.

In this example, all of the £40,000 was remitted in July. However the remittances might be split between the payment on account dates, for example £20,000 remitted on 31 January 2009 and a further £20,000 on 31 July 2009. In such cases, unless the taxpayer specifies otherwise, the £10,000 that is not subject to the exemption and so is a taxable remittance will be treated as having occurred at the later date, as this will usually be in the taxpayer’s favour.

Refer to RDRM34030 for example of where the ‘remittance basis charge’ is repaid to Alex, or otherwise no longer applies

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Nominated Income or gains

If taxpayers use nominated income or gains to pay the remittance basis charge of either £30,000 or £50,000 it is treated as not remitted to the UK under section 809V. Because none of the individual’s nominated income or gains is treated as having been remitted to the UK in that tax year you do not have to apply the ‘ordering rules’ at ITAs809I and s809J. See RDRM35100 Remittances of nominated income or gains.

lf the remittance basis charge is repaid by HMRC it is treated as remitted at that point (see RDRM34030) and section 809I will be triggered.