RDRM35680 - Remittance basis: Mixed funds: Cleansing of mixed funds: Pre 2008 accounts and funds
There are rules to help determine the composition of a pre-6 April 2008 mixed fund. These rules are split to cover a transfer made:
- from a pre-2008 mixed fund before 6 April 2008 (RDRM35690), or
- to a mixed fund before 6 April 2008 (RDRM35700).
Prior to 6 April 2008 the statutory rules for mixed funds did not apply. However, besides being able to cleanse an account containing funds which arose post 6 April 2008, individuals were also able to cleanse:
- an account that contains funds from both pre and post 6 April 2008
- an account that only contains only pre 2008 funds,
if they met the qualifying individual conditions and, as with post 2008 cleansing the other conditions for a cleansing transfer
The qualifying individual conditions are:
- They must have claimed the remittance basis under either Sections 809B, 809D or 809E of the Income Taxes Act (ITA) 2007 for one or more tax years between 2008-2009 and 2016-2017 (inclusive)
- They were not born in the UK with a UK domicile of origin.
Example
Solidad, prior to 6 April 2008 had always claimed the remittance basis, since this date she has always been assessed on the arising basis. As she has never claimed under Sections 809B, 809D or 809E of ITA 2007 she will not be a qualifying individual. She has bank accounts containing pre 2008 funds from various sources and years (mixed fund accounts), but she will not be able to cleanse such accounts.
Her sister Maria’s circumstances are identical to Solidad’s, except for the fact that in 2008-2009 she automatically qualified for the remittance basis under Section 809D ITA 2007 – her unremitted foreign income and gains were less than £2,000. Maria will be able to cleanse her mixed fund accounts if she chooses to do so.