RDRM33122 - Remittance Basis: Identifying Remittances: Conditions A and B: Condition A – money or property used outside the UK
Source: gov.uk (2025-07-31)


From 6 April 2025, section 809L(2)(c) ITA 2007 provides that there is a remittance of foreign income and gains where money or other property is used outside the UK, directly or indirectly, for the benefit of a relevant person in the UK. This includes, but is not limited to, property used outside of the UK to settle a relevant person’s obligation within the UK, as this would be a benefit for the relevant person whose obligation is settled as a result.

This may happen in situations where an individual has an obligation in the UK that would normally require money or other property to be brought to, received or used in the UK, but they enter into an agreement with another party to satisfy that obligation in another way by using their foreign income and gains outside the UK instead.

Examples of UK obligations could include, but are not limited to:
- a payment required under a UK court order
- a payment made to settle a claim brought in the UK
- a payment made as required under a UK child maintenance liability order
- a payment made for contractual damages, from which the obligation arises as the contract is governed by UK law
- a payment made to satisfy compensation for UK Tort
- the waiver of a UK debt
The benefit received by the individual may be something other than the settlement of an obligation. It isn't necessary that the benefit come about by the settlement of a contract or similar. 'Benefit' is not defined in Chapter A1 Part 14 ITA 2007 and takes its ordinary meaning.

Example 1

Taylor is a former remittance basis user and the 100% shareholder of a UK company, Taylor’s Dog Food Ltd (‘TDF’). TDF is therefore a relevant person to Taylor. The company owes a trade debt to another UK company, Juicy Bones Ltd (‘JB’), but does not have enough cash to pay.

Taylor wants to avoid the company becoming insolvent and decides to use her untaxed foreign income to enable the company to be released from its debt. Instead of investing her foreign income in TDF directly, through a loan or by subscribing for additional shares, she enters into an agreement to make a payment offshore to a foreign company in the same group as JB. In return, JB agrees to write off TDF’s trade debt.

TDF, a relevant person, has received a benefit in the UK, as it has been released from its obligation to pay the trade debt. Condition A is met because Taylor used money outside the UK to release TDF from its trade debt. In order to determine whether there has been a taxable remittance, Condition B must now be considered - see RDRM33140 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33140) onwards.

Example 2

Greg is a former remittance basis user and is resident in the UK with his partner Mina. After several years Greg and Mina decide to separate, and they enter into a financial agreement in the UK to determine the division of their assets. The terms of the financial agreement require Greg to make a lump sum payment of £500,000 to Mina.

To satisfy this obligation, he pays £500,000 from his Jersey bank account containing his untaxed foreign income to an account at the same bank belonging to Mina. After they have separated, Mina transfers the £500,000 to her UK bank account.

As Greg has used the money to satisfy his UK obligation, in accordance with the terms of the financial agreement, Condition A is met when he makes the payment to Mina. This is because Greg has used money outside the UK to satisfy his obligation under the financial agreement. In order to determine whether there has been a taxable remittance, Condition B must now be considered - see RDRM33140 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33140) onwards.

It does not matter that the payment was made to Mina’s offshore bank account, or that Mina is no longer a relevant person to Greg after the separation, when she brings the £500,000 to the UK.