RDRM35010 - Remittance Basis: Amounts remitted: Quantification: Overview of Quantification
Remittances of cash or property
Services and Consideration for services
Amounts remitted more than once
This section of the guidance explains how to calculate the amount of foreign income or gains that is treated as remitted to the UK and therefore chargeable to tax (see RDRM33020 for the meaning of remittance).
Remittances of cash or property
Sections 809P to 809S ITA 2007 provide some detailed instructions on how the amount of income or chargeable gains remitted to the United Kingdom is to be determined. In cases where, for example, a cash amount of foreign income or gains (see note below) is brought to the UK, this calculation is relatively straightforward, as the amount that is liable to tax is the amount of money that is brought to the UK. See RDRM35020 for quantification examples.
Or, in the case of property brought to the UK that was purchased using foreign income and gains the taxable amount is not the value of the property when remitted, but the amount of foreign income and gains (see note below) that was originally used to fund the purchase.
From 6 April 2025, where money or property is used outside the UK to provide a benefit in the UK, the amount remitted is the amount of foreign income or gains that have been used to provide the benefit. It is not the value of the benefit in the UK.
Where property brought to the UK forms part of a set and only part of that set is in the UK the amount remitted is calculated by making a just and reasonable apportionment of the amount that would have been remitted if the whole set had been brought to, or received or used in the UK rather than just the part - section 809P(13).
Note: This chapter, and the examples below use the phrase remittance of ‘foreign chargeable gains’, or refer to such gains being ‘remitted’ or property or assets being ‘derived from’ such gains. This phraseology is used throughout as convenient shorthand. In practice foreign chargeable gains will usually be part of the proceeds from the sale of an asset, which will likely be a mixed fund, so the mixed fund rules may need to be considered too.
Services and Consideration for services
When, rather than property being brought to the UK, foreign income or gains are used to provide a service in the UK or another benefit, the amount of the remittance is again the amount of the income or chargeable gains given in consideration for that service.
Derived from
If the money or other property, service or consideration for the service mentioned in Condition A is not the original foreign income or gains but is derived from foreign income or gains of an individual, the amount remitted is equal to the original foreign income and gains from which the property etc derives. The scope of derivation can be very wide. Refer to RDRM33150 and to RDRM35030 for quantification examples.
Amounts remitted more than once
Where the same foreign income or gains are remitted more than once, section 809P(12) limits the amount remitted to the amount of the foreign income or gains, to prevent the same foreign income or gains being charged to tax more than once.
For example, if an individual had a taxable remittance of £100,000 of foreign income in 2023-24, then a subsequent taxable remittance of £50,000 of that same foreign income in 2024-25, without section 809P(12) that individual would have taxable remittances totalling £150,000 in relation to £100,000 of foreign income. Section 809P(12) therefore limits the total amount that can be charged to tax in relation to that foreign income to £100,000.
This means that section 809P(12) effectively reduces the amounts of subsequent remittances of the same foreign income or gains, but only reduces the amount of a subsequent remittance if an earlier remittance of the same foreign income or gains has been charged to tax.
In the case of pre-6 April 2008 foreign income or gains, transitional provisions introduced with the 2008 remittance basis rules mean that in some cases a subsequent remittance would not be treated as a remittance, even though it would otherwise meet the conditions within section 809L ITA 2007. In these circumstances, section 809P(12) does not apply since it is deemed there is no second remittance. See RDRM31400 onwards for further details on the transitional provisions.
To note, the wording of section 809P(12) was amended in FA 2025 to clarify how this subsection operates; it has not changed how section 809P(12) functions.
Example 1
On 3 April 2020 Gilbert transferred £350,000 of his foreign gains to his UK bank account in order to purchase a house in Oxford. The funds remained in his account until 1 May 2020, when they were used to complete the purchase.
Gilbert remitted the foreign gains during the 2019-20 tax year when he transferred them to his UK bank account. As Gilbert is UK resident, he was taxed on the remittance of £350,000 of foreign gains in 2019-20. In 2020-21, when Gilbert used his foreign gains to purchase a house, this was another remittance as it meets Conditions A and B. However, because Gilbert has previously remitted the same £350,000 of foreign gains, his remittance in 2020-21 is reduced by reference to the amount of foreign gains previously remitted and taxed in 2019-20. Therefore, the amount remitted in 2020-21 that is taxable is reduced by £350,000 to nil so there is no tax charge in 2020-21.
If
Gilbert had not been charged to tax on the 3 April 2020 remittance, section 809P(12) would not have reduced the amount remitted on 1 May 2020, and he would have had a taxable remittance of the £350,000 of foreign gains in the 2020-21 tax year. However, if Gilbert had not been charged to tax because he was non-UK resident for the 2019-20 tax year, the foreign gains may qualify for re-remittance relief – see RDRM35090.
Example 2
Demi was a remittance basis user prior to 6 April 2008. During the 2007-08 tax year she brought £100,000 of relevant foreign income to the UK in circumstances that did not result in a taxable remittance under the pre-6 April 2008 remittance basis rules.
In 2025-26, Demi uses the £100,000 to purchase a UK property. Although this would otherwise meet the conditions within section 809L and result in a remittance of the £100,000, because Demi originally remitted the funds prior to 6 April 2008 the transitional provisions apply, see RDRM31460. Due to the transitional provisions the foreign income is treated as not remitted and there is no charge to tax in 2025-26, or in future years if the same foreign income is re-remitted. Because no remittance is deemed to have occurred, section 809P(12) therefore does not need to be considered.
If Demi had not remitted the £100,000 prior to 6 April 2008 and the cash had remained offshore, the transitional provisons would not prevent that amount being taxable on remittance after 6 April 2008. Therefore, if Demi were to remit the amount more than once after 6 April 2008, section 809P(12) would prevent Demi being taxed more than once on this amount, after the first post-6 April 2008 remittance has been charged to tax.
Mixed Funds
Determining the amount of remittances from mixed funds is governed by strict statutory rules. Mixed funds are funds containing two or more types of income, gains or capital, or funds containing income, gains or capital from two or more tax years.
Although the principle of these rules is fairly simple to follow, their application requires detailed knowledge and accurate labelling of precise year and sources of income, gains and capital that make up the mixed fund, and details of all transfers where money leaves that mixed fund. You will need to obtain this information in order to check any amounts remitted from mixed funds.
Also refer to RDRM34000 for exceptions such as art brought to the UK for public display, repair etc.