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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance basis: exempt property, lost, stolen or destroyed

Prior to 6 April 2013 property that ceased to be exempt property was treated as having been remitted to the UK at the date it ceased to be exempt. That meant that if property was lost, stolen or destroyed a remittance would have occurred even though the individual would be unable to remove the property from the UK.

From 6 April 2013 section 809Y(4A) ITA 2007 says if the exempt property has either been lost, stolen or destroyed the property will not be treated as remitted during any period:

a) beginning with the time at which it was lost, stolen or destroyed, and

b) (if lost or stolen) ending with the time at which it is recovered.

If a compensation payment is received in respect of exempt property that is lost, stolen or destroyed then if the following conditions are met it is not treated as a taxable remittance to the UK (section 809YF ITA 2007).

Condition A - the whole of the compensation payment is either taken offshore or used to make a qualifying investment (under the business investment relief provisions), or a combination of the two within the period of 45 days, beginning with the day on which the compensation payment is released.

Condition B - if the funds have been used either wholly or in part to make a qualifying investment a claim to relief must be made on or before the first anniversary of 31 January following the tax year in which the payment is released.


Ilsa brings a piece of antique furniture, purchased with her foreign income, to the UK under the temporary importation rule. Ilsa intends to take the property offshore within the 275 day time limit, however it is stolen from her house on 17 September 2014. The day counting stops on the day the property was stolen. An insurance compensation payment is released to Ilsa on 22 March 2015. Provided Ilsa takes the payment offshore, or invests it under the Business Investment Relief provisions (see RDRM34300) within 45 days of receiving it, no remittance will occur.

The compensation payment will be treated as containing or deriving from the same type of income or gains equal to the amounts which were originally contained in the exempt property.

If the compensation payment is subsequently remitted to the UK or if it ceases to meet the qualifying conditions for business investment relief a remittance of foreign income will result.