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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

HM Revenue & Customs
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Remittance Basis: Remittance Basis up to 6 April 2008: Previous to 6 April 2008: What is a remittance?

Finance Act 2008 introduced statutory definitions and rules for claiming the remittance basis and provides greater definition on the issue of remittances. Prior to Finance Act 2008 there was little legislation on the actual definition of a remittance, and thus the approach derived largely from case law principles.

When considering if a taxpayer has made a chargeable remittance before 6 April 2008 it is necessary to identify if a sum of money has been received in the UK.

The leading case on this subject is Thomson v Moyse (39TC291). Mr Moyse was UK resident but not domiciled in the UK. He had a bank account in New York containing foreign income. He wrote a number of cheques drawn on his New York account and sold them to UK banks in return for pounds sterling. The UK banks sent the cheques to New York to be cashed into US dollars. Mr Moyse argued that the money he received in the UK were not ‘sums received in the UK’. That was because no part of his overseas income had been physically brought to the UK. The House of Lords decided that he had made a taxable remittance of his foreign income.

The main principles derived from this case are that the physical importation of ‘cash’ is not essential for there to have been a remittance, nor is the precise method of transfer of any significance. So there is a taxable remittance when money is received in the UK

  • it is not necessary that the amount that is received in the UK is in cash form; it may be received in another form of money such as bills of exchange, cheques, promissory notes or ‘cash at bank’
  • the money that has been received must come out of the taxpayer’s foreign income, or be deductible from it or be traceable to it, so that the taxpayer’s foreign income is seen to be the provider of the sums received in the UK
  • the individual need not directly receive the funds himself. It is sufficient if money is received in the UK by some third person on the authority of the taxpayer.

In each of the following examples, to the extent of the amount of foreign income and gains in the account, the money received is a taxable remittance.


Example 1

Taxpayer writes a cheque on a foreign bank account as payment to a UK tradesman for work done in the UK.

Example 2

Taxpayer issues instructions by letter or fax to his foreign bank to transfer funds to the bank account of a UK person, whether his own bank account or that of some other person) from which he or she will benefit in some way.

Example 3

When physically outside the UK, a remittance basis user writes a cheque on an overseas bank account and sends it to the UK (or brings it with him or her when they return).

Example 4

Taxpayer uses a Visa or Cirrus bank card issued by a foreign financial institution to withdraw money from a UK bank cash machine.

Example 5

Taxpayer writes a cheque drawn on a foreign bank account and gives it to a UK resident relative as a gift.