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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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HM Revenue & Customs
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Remittance Basis: Remittance Basis up to 6 April 2008: Employment Income: Income cannot become capital

The investment of income abroad does not change its character as income and whether the investments or assets are realised abroad and the proceeds remitted here (Walsh v Randall (23TC55) and Patuck v Lloyd (26TC284)) or whether they are transferred here and then realised (Scottish Provident Institution v Farmer (6TC34)). Such transactions give rise to ‘sums received’ and the amounts are taxable.

On the other hand, the mere transfer to the United Kingdom of such investments or assets other than commercially recognisable forms of money is not a taxable remittance unless the asset is subsequently sold (Scottish Widows’ Fund Life Assurance Society v Farmer, 5TC502).