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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance Basis: Remittance Basis up to 6 April 2008: Occasions when there may not be a remittance: Ceased Source

Relevant Foreign Income (RFI) is considered to have been remitted and so chargeable to tax only where ‘sums received’ are from a source that existed in the year of remittance.

This means, for example, that bank interest is taxable before 6 April 2008 only when amounts are brought to the UK from an account that continued to exist in the tax year in which the remittance was made. If the account on which interest was paid was closed in an earlier tax year and the amounts in the fund were transferred to a new account, the interest earned on the closed account was not taxable. This was sometimes referred to as the ‘ceased source’ principle.

This ‘ceased source’ rule did not apply to foreign Employment Income or foreign Capital Gains.


Suchet, a non-domiciled individual, who has been UK resident for several years opened a bank account in Switzerland in 1998 and deposited 2,000,000 CHF. Interest arising each year was credited to the account. Suchet did not make any remittances to the UK.

Suchet closed the account on 20 March 2003 and opened a new account In Guernsey into which he transferred the money from the previous account. On 8 April 2003 Suchet remitted £500,000 to the UK from his account in Guernsey. No interest arose on the Guernsey account in the period 20 March 2003 to 8 April 2003.

The account in Switzerland was closed in tax year 2002-03. The remittance was made to the UK in tax year 2003-04 when Suchet no longer owned the source that gave rise to the income (his interest-bearing Swiss account). The amount remitted by Suchet was regarded as capital and was not chargeable as a remittance of income.

Note: From 6 April 2008 remittances of relevant foreign income whenever it arose (which may include years prior to 2007-08) are chargeable whether or not the source of the income has ceased at the time the income is remitted (ITTOIA05/s832).