RDRM33020 - Remittance Basis: Identifying Remittances: Overview of identifying a remittance: Meaning of remittance - overview of Conditions A, B, C and D
Source: gov.uk (2025-04-07)


The rules on remittances that took effect on 6 April 2008 allowed UK residents with a non-UK domicile to be taxed on the remittance basis. This means that whilst they paid tax on their UK income and gains on the arising basis in the same way as other UK residents, they only paid tax on their foreign income and gains when these are remitted to the UK.

From 6 April 2025, the remittance basis of taxation has been abolished, with the concept of domicile as a relevant connecting factor in the tax system having been replaced by a system based on tax residence. From this date, all UK residents are taxed on the arising basis of assessment on their worldwide income and gains.

This means the 2024-25 tax year was the last year for which the remittance basis could be claimed, or could apply automatically.

Any foreign income or gains that have arisen to a former remittance basis user prior to 6 April 2025 continue to be taxed at the usual tax rates if they are remitted to the UK on or after 6 April 2025, subject to any amounts designated under the temporary repatriation facility (TRF) - see RDRM71000 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm71000).

The remittance basis rules from section 809L ITA 2007 onwards set out the circumstances in which there will be a taxable remittance.

A remittance occurs where the following conditions are met:
- Conditions A and B, which are taken together (see RDRM33100 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33100))
- Condition C (see RDRM33200 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33200))
- Condition D (see RDRM33400 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33400))
Conditions C and D stand alone.

Overview of the Conditions

Conditions A and B are the primary rules and likely to apply to most transactions as they apply to remittances of foreign income or gains if they are brought to, received or used in the UK, by, or for the benefit of, the individual or a person closely connected to them known as a 'relevant person' - (see RDRM33030 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33030) for a definition).

A taxable remittance under Conditions A and B also occurs where a service is provided in the UK for the benefit of the individual, or any other relevant person, and the consideration for that service is met using the individual’s foreign income or gains.

From 6 April 2025, a taxable remittance occurs under Conditions A and B where foreign income and gains are used outside the UK to provide a benefit in the UK for a relevant person.

Condition C applies where an individual gives property away (usually overseas) to someone who is not a relevant person but the property is enjoyed by the relevant person in the UK.

Condition D applies where foreign income or gains are enjoyed in the UK, as a result of indirect but connected arrangements which fall outside the scope of Condition A and B, or Condition C.

There is a taxable remittance where foreign income and gains are used outside of the UK ‘in respect of’ a relevant debt, for example to repay the capital loan or to service the interest on the debt. The term ‘relevant debt’ is explained in more detail at RDRM33040 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33040) but broadly it means a debt that relates in some way to money, property or a service that would, in the absence of the debt, be a remittance of the individual’s foreign income and gains. It also applies to the servicing of debts that relate to property or the provision of services in the UK and cases where the foreign income and gains are used as collateral by being offered to secure a debt (see RDRM33170 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33170)).

The rules apply both to tangible or physical property (including money) as well as intangible property, and to any benefit that might result from an arrangement that is entered into by or on behalf of a relevant person. The result is that the former remittance basis user is liable to UK tax where their foreign income and gains are brought to the UK or, are otherwise used for the benefit of a relevant person.

RDRM33050 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm33050) gives examples of remittances to the UK, though this list is not exhaustive.

Even where there has been a remittance to the UK within section 809L ITA 2007, you may also need to consider some of the 'exemptions' explained in RDRM34000 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm34000) to determine whether there is any tax liability arising.

Note: These chapters use the phrase remittance of ‘foreign chargeable gains’, or refer to such gains being ‘remitted’. This phrase is used throughout as convenient shorthand, and for simplicity. In practice foreign chargeable gains will usually be part of the proceeds from the sale of an asset, which will likely be a mixed fund and both the remittances from a mixed fund and offshore transfer rules may apply (refer to RDRM35200 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm35200)).