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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 - Repair rule - property

Property of any description that derives from foreign income or foreign chargeable gains that is brought to the UK is ‘exempt property’ (ITA07/s809X) if it is brought to the UK for repair or restoration ITA07/s809Z3(2) and (3).

Property which, if it were not for the repair rule (or any other rule exempting it), would be a remittance to the UK, meets the repair rule if it meets the ‘repair conditions’ for the whole of the period that the property is in the UK.

The ‘repair conditions’ are that the property is:

  • under repair or restoration
  • in transit from outside the UK to allowable repair premises
  • in transit from allowable repair premises to a place outside of the UK
  • in transit between allowable repair premises
  • in storage at allowable repair premises before restoration or repair
  • in storage at allowable repair premises after restoration or repair

Property meets the repair rule for part of a continuous period that the property is in the UK if the property meets the repair conditions for that period and during the other part of that period, or the whole of each other part, the property meets the repair conditions or the public access rule.

The repair rule will only be met for each period if the repair conditions or the public access rule is met for part or the whole of the first and last day of the period and the whole of each day in between.

Example 1

Deepak arranges for a valuable painting which he purchased at auction in Italy out of his foreign dividend income to be shipped to a specialist restoration studio in the UK for cleaning. The next day, after the painting has been cleaned it is shipped to his chateau in France.

The repair rule is met as during the whole period the painting was in the UK it was either in transit to or from the repair premises or in the process of being restored. The painting is exempt property so Deepak has not made a chargeable remittance.

Example 2

Sandro has a Pietra Dura table at his villa in Tuscany, which he purchased using his foreign royalty income. He arranges for his table to be shipped to the UK to form the centrepiece of a public display for 12 months at a museum in Colchester. All the conditions for meeting the public access rule are met.

Whilst on display the table gets damaged and is sent to RRC’s Repair and Restoration Chambers where it is stored, repaired and then shipped to Italy, to rejoin the travelling exhibition there.

The repair rule is met as during the whole time the table was in the UK the painting either met the public access rule or the repair rule. The table is exempt property so Sandro has not made a chargeable remittance.