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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance basis: amounts remitted: remittances of 'nominated' income or gains: remittances of nominated income or gains - miscellaneous

Accidental remittances

If an individual accidentally remits any nominated income or gains to the UK then HMRC will (using its discretionary powers) allow them to undo their mistake, by reversing the transfer without unreasonable delay and in any event before the end of the tax year, for example by paying the income or gains back to the original account, so that the ordering rules at s809I and s809J will not apply.

HMRC will only use its discretion in such situations as long as there have been no relevant transactions or other benefits conferred on a relevant person in the interim. Otherwise the s809J ordering rules will apply.

For example, if £20,000 is transferred in error from an overseas bank to a UK bank account and two weeks later the account owner realises the mistake and immediately transfers that £20,000 directly back to the overseas bank account, HMRC will accept that s809I and s809J do not apply. However if, for example, the £20,000 was spent in the UK and then £20,000 from another UK account was transferred back to the overseas account then s809I and s809J do apply.

From 6 April 2012, so for tax year 2012-13 onwards an individual can remit nominated income up to £10 for any tax year for which a nomination has been made without having to reverse the transfer (refer to RDRM35110).

Remittance basis charge and section ITA07/s809V

If taxpayers use nominated income or gains to pay the remittance basis charge it is treated as not remitted to the UK under ITA07/s809V (refer to RDRM34020 Remittance basis charge - money paid directly to HMRC) provided the payment is made directly to HMRC from an overseas account. Therefore the ‘ordering rules’ at ITA07/s809I and s809J do not apply because none of the individual’s nominated income or gains is regarded as having been remitted to the UK in that tax year.

lf the taxpayer subsequently withdraws their claim to remittance basis for the year the nominated amount will be treated as remitted, triggering the provisions in ITA07/s809I.