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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: Mixed Funds: Joint Accounts

Where a remittance basis user has an offshore bank account held jointly with another person there may be additional difficulties in identifying the nature of the monies in the account, and any transfers of monies from the account.

Earned Income

Employment income and pensions are not regarded as ‘joint property’ when received by the employee or pensioner - refer to the Independent Taxation Manual IN127+. So any foreign earnings or foreign pension income is attributable only to the employee or pensioner to whom they ‘belong’.

Income from jointly held property

ITA07/s836(2) provides that where a married couple or civil partners are living together and income arises from property held in their joint names, both individuals are treated for income tax purposes as beneficially entitled to one-half of the income regardless of their actual respective beneficial entitlements, unless they make a joint declaration that it shall be otherwise under ITA07/s837. Refer to the Independent Taxation Manual IN115+ for further details.

Note: The legislation that applies to years before 2007-08 was ICTA88/s282A and s282B and had similar effect.


An offshore bank account was opened on 20 June. It is held jointly by A and B.

A is a remittance basis user in this year. The account shows:

Date Credit Debit Balance Attributable to
20 June £2,000   £2,000 A - foreign earnings
27 June £1,000   £3,000 A - relevant foreign income
7 July £90   £3,090 B - UK rental income
9 July   £800 £2,290 B - cash taken out in London

In analysing the account you need to look at what was in the account and attributable to each person. In this case, only £90 of the cash withdrawn by B in London on 7 July can be attributed to B’s income, the remainder must be A’s income credits and A will be regarded as having remitted that £710.

It follows that transfers from the non-remittance basis using individual may be a taxable remittance on the other partner if it is regarded as consisting of or deriving from the other partner’s foreign income or gains.

Cases where both account holders are remittance basis users

You will still need to analyse the account in order to determine which transfers from the mixed fund are taxable remittances, and to determine which account holder is liable to pay any tax due. Again, you should try to take the most pragmatic approach that best reflects the reality of the situation.

The following example demonstrates the principles of analysing a joint account and then determining whether the ‘transfers’ are a taxable remittance from a mixed fund.

For detailed information about the treatment of joint accounts refer to RDRM33510.