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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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HM Revenue & Customs
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Remittance Basis: Exemptions: Relevant services provided in the UK not included in exemption

The service exemption at ITA07/s809W to treat remitted income and gains in respect of certain UK services as not remitted does not apply where the service provided in the UK relates in any part to provision of:

  • a benefit that is treated as deriving from the income by virtue of ITA07/s735
  • a relevant benefit within the meaning of TCGA1992/s87B that is treated as deriving from the chargeable gains by virtue of that section.

Section 735 is linked with the making of a benefit to an ordinarily resident individual following the transfer of assets abroad by somebody other than the person receiving the benefit. Following the transfer of assets, income must arise to a non-resident person.

For example Jeremy transfers a property to a foreign company, the foreign company receives income as a consequence of the transfer and then provides a benefit to another person - Diarmuid - INTM600030.

Section 87B is linked with the making of a benefit to a beneficiary of a non-resident settlement or a settlement that was non-resident at some time.

Capital payments, payment of boarding school fees, interest free loans, or the provision of legal advice are examples of benefits that an offshore structure including a settlement might make to the individual or beneficiary.

These are largely anti-avoidance provisions, and have complex rules of their own. Please refer to Specialist Personal Tax, PTI Advisory, Foreign Income and Remittance Basis Team. if you need further details on the application of this part of the service exemption.