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HMRC internal manual

Savings and Investment Manual

Savings and investment income: foreign income: unremittable income

Some countries impose exchange controls to regulate the flow of money. Where a person has income arising in one of these countries, it may be impossible to bring the income into the UK either because it is not permitted by the authorities in that country or because it is difficult to obtain foreign currency there. In these circumstances, tax could become due on income that was not available to pay the tax bill and hardship could result. Special rules in Chapter 4 Part 8 of ITTOIA05 allow an individual or trustee to claim that unremittable income should not be brought into charge when it arises.

The most common example is that of a UK resident who has a bank account in a country that imposes restrictions on the movement of currency.

TCGA92/S279 provides a similar relief from chargeable gains on the disposal of assets outside the UK (See CG78401).

CTA09/S1275 provides a similar relief for unremittable overseas income of a company. Under ITTOIA05/S841 a claim is admissible where a person is unable to transfer the overseas income to the UK because of the laws of the territory where the income arose, or executive action of its Government, or the impossibility of obtaining foreign currency there.

For years before 2005-06 claims are made under ICTA88/S584 (2). The earlier rules also required that the income should no be unremittable due to ‘want of reasonable efforts’ on the taxpayer’s part, but this requirement was omitted from ITTOIA05 and should not be interpreted harshly for 2004-05 and earlier years.


Laura has a bank account in another country where money is deposited from her mother’s estate. She cannot bring the money back to the UK because of strict exchange controls. She has the option of putting the money into low yield government bonds in that country, and income from these bonds can be remitted to the UK. HMRC will accept that it is not reasonable for Laura to have to put the money in low yield bonds, and that the interest on the account is unremittable.

Trade income

Savings and investment income is the most common example of unremittable income but the rules apply to any income ‘arising in a territory outside the UK’. This may include income from an overseas trade, but not the overseas debts of a trade etc, carried on in the UK, which cannot be settled owing to currency restrictions. See BIM42740 for more details.

No relief is due where payments are made to a person by the Export Credits Guarantee Department, which administers an insurance scheme under which, payments may be made to UK residents in respect of unremittable overseas income. Where relief under ITTOIA/S842 (1) has been allowed in respect of unremittable income, the relief must be withdrawn to the extent of any such insurance payments. The income will then become assessable under ITTOIA/S843 (SAIM1160).