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HMRC internal manual

Savings and Investment Manual

Accrued Income Scheme: other excluded persons: non- residents


ITA07/S643 (1) exclude a person from being a transferor or transferee where he isnon-UK resident throughout the tax year in which a transfer occurs and not ordinarilyresident in that tax year.

Non-resident traders

ITA07/S643 (2) also excludes a non-resident who carries on a trade in the UK through abranch or agency, but not where

  • the securities are situated in the UK and used for the purposes of the UK branch or agency before the transfer, or
  • the securities are situated in the UK at the time of the transfer and were acquired by it for use by or for the purposes of the branch.

The rules that apply for capital gains tax purpose (TCGA92/S275 and S275C) determinewhere the securities are situated.

FOTRA (Free of Tax for Residents Abroad) Securities

These are securities issued by the British Government on terms that any profits orgains arising from them are exempt from UK tax provided they are beneficially owned bypersons not ordinarily resident in the UK (FA96/S154). With effect from 6 April 1998,FA98/S161 changed the status of gilts issued without FOTRA conditions. Subject totransitional provisions for the Accrued Income Scheme in FA98/S161 (2)(a), all gilts arenow FOTRA securities whenever they were issued, including those issued before 6 April1998. Persons not ordinarily resident in the United Kingdom, who dispose of or acquire thesecurities as beneficial owners, are therefore excluded from the AIS on transfers of suchsecurities. See also SAIM1180.