»Ê¹ÚÌåÓýapp

Paragraph 83(1) and (2) Schedule 7 Finance Act 2008

Background

Following the introduction of ITTOIA 2005 for the tax years 2005-06 to 2012-2013, individuals who were not ordinarily resident (NOR) and/or non-domiciled (ND) usually needed to make a claim for the remittance basis of taxation to apply in respect of their relevant foreign income RDRM31140, that is income taxed under ITTOIA05/s831.

From 6 April 2013 only individuals who are non-domiciled in the UK will be able to claim remittance basis, after the introduction of the Statutory Residence Test (SRT).

For tax years before 2005-2006, ICTA88/s65(5) applied the remittance basis to any foreign income taxable under Case IV and V of Schedule D.

Transition

»Ê¹ÚÌåÓýapp transitional provisions apply ITTOIA05/s832, as amended by Finance Act 2008, as if the individual had made a claim under ITA07/s809B for the remittance basis of taxation to apply for the relevant year.

»Ê¹ÚÌåÓýapp above also applies where the remittance basis is, or would have been, due without the need to make a claim (ITA07/s809D and s809E).

Effect

This ensures that foreign income that arose in tax years prior to 2008-2009, and to which ITTOIA05/s831 or ICTA88/s65(5) applied is taxable when remitted to the UK after 6 April 2008 under the rules provided in Finance Act 2008, even if the individual does not choose to use or claim the remittance basis under the new rules in 2008-2009 or later tax years.

This applies whether the source from which the income arose is in existence at the time the income is remitted or not.

Note: This transitional provision applies only to relevant foreign income. That is because the pre 6 April 2008 position for employment income and capital gains was different. »Ê¹ÚÌåÓýappse amounts were always chargeable on the remittance basis if the individual met the appropriate NOR or ND status requirements.