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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: Exempt Property - Personal use rule - clothing, footwear, jewellery or watches

The personal use rule applies to remittances involving clothing, footwear, jewellery and watches that have been acquired or that derive, directly or indirectly, from an individual’s foreign income or foreign chargeable gains. These are exempt property and meet the personal use rule (ITA07/s809Z2) if:

  • they are owned by a ‘relevant person’ RDRM33030 and
  • are for the personal use of

    • the individual
    • the individual’s husband, wife or civil partner, or persons living together as if they were spouse/civil partners
    • a minor child or grandchild of any of the above

Example 1

Stanislav, a Polish national, comes to the live in UK on 6 April 2012 and is resident for tax year 2012-13. He goes back to Poland for a month at Christmas and whilst he is there he does some part time work for his old employer; these are ‘relevant foreign earnings’. With the money earned in Poland in December he buys himself a designer suit for £1,500 and matching overcoat for £1,200 in Poland which he brings with him when he returns to the UK in the New Year.

Stanislav decides to use the remittance basis in 2012-13. The suit and the overcoat derive from Stanislav’s foreign income so would be taxable as remittances when brought to the UK under ITA07/s809L but as they are owned by a relevant person (Stanislav) and are for his own personal use they are exempt property under the personal use rule. Stanislav has not therefore made a chargeable remittance.