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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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Remittance Basis: Exemptions: Public access rule - Condition C - two year period

Condition C ITA07/s809Z(7) is met if during the relevant period the length of time in which the property is available for public access, or the property is in transit or in storage pending or following public access, is no more:

  • than two years, or
  • such longer period as the Commissioners may specify.

The relevant period starts with the importation of the property and ends when the property ceases to be in the UK after that importation.

For these purposes, property is treated as brought into the UK or imported if it is brought to the UK in circumstances such that it would be treated as a remittance to the UK within Condition A of ITA07/s809L (refer to RDRM33120 Condition A - property) if it were not for this public access rule (or any other rule exempting it) (ITA07/s809Z(9)).

The two year period will not necessarily start with the importation of the property as the property may not have been available for public access when it was first imported into the UK. For example it may be brought in under the temporary importation rule prior to public access.

Again the two year period will not necessarily end when the property ceases to be in the UK as the property may cease to be available for public access before the property actually leaves the UK. For example it may instead qualify under the repair rule after a period of public access.

Example 1

Faizal is a UK resident remittance basis user. He is asked by a London museum, which is an approved establishment, if he will contribute a vase that he owns to an exhibition that the museum intends to stage. The vase is derived from Faizal’s relevant foreign income.

Faizal arranges for the vase to be shipped to the UK from his holiday home in Switzerland. In May the vase is received by the museum and is put into secure storage for one month after which the museum will begin to set up the special exhibition. The exhibition lasts until the following year in October, at the end of which the vase is returned to Switzerland. The vase has been in the UK for 18 months in total. The vase is exempt property so Faizal has not made a chargeable remittance.

Example 2

The circumstances are the same as Example 1 but this time, at the end of the exhibition, the vase is not returned to Switzerland. Instead, Faizal asks for the vase to be sent to a well known restorer in Newcastle to be cleaned. The restorer keeps the vase in his business premises for a further eight months and then in the following June Faizal arranges for it to be sent back to his home in Switzerland.

The vase has been in the UK for 26 months. The vase, purchased using Faizal’s relevant foreign income is exempt property under the public access rule for the 18 months from its arrival in the UK in May to the October in the following year.

Between October and the following June it is within temporary importation rule (as it is with the repairer) and so remains exempt property. As the 2 year time ‘repair’ limit at Condition C has not been exceeded the vase remains exempt property throughout and Faizal has not made a taxable remittance.

Any requests under the terms of ITA07/s809Z(7)(b) to extend the period during which property may remain in the UK under the terms of the public access rule should be made to Specialist Personal Tax, PTI Advisory, Foreign Income and Remittance Basis Team.