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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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Remittance Basis: Amounts remitted: Quantification: Overview of Quantification

This section of the guidance explains how, for the purposes of Conditions A and B, Condition C and Condition D (refer to RDRM33020), the amount of foreign income or gains that is remitted to the UK and so chargeable to tax is calculated.

Remittances of cash or property

ITA07/s809P to s809S provides 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.

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.

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 - ITA07/s809P(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 you may need to consider the mixed fund rules 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 

Mixed Funds

Determining the amount of remittances from mixed funds is now governed by strict statutory rules. Mixed funds are funds containing two or more types of income or gains and/or funds containing income or gains 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 ‘monies’ that make up the mixed fund ‘pot’, 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.