RDRM32130 - Remittance Basis: Accessing the remittance basis: Exceptions to the claim requirements up to 5 April 2025: Below £2,000 threshold users: Years of arrival and departure - interaction with Extra Statutory Concession (ESC) D2 and SRT split year treatment
Source: gov.uk (2025-04-07)


From 6 April 2025 it is not possible to use the remittance basis of taxation, however, any foreign income or gains that have arisen to a former remittance basis user prior to this date will 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 guidance in this section only applies to tax years up to and including the 2024-25 tax year and remains for reference purposes only.

For years up to 2012-2013 ESC D2 may apply to an individual for the year in which they arrive or leave the year.

Broadly speaking an individual arriving in the UK who has not been resident or ordinarily resident in the United Kingdom for five years before the year of arrival is not chargeable on capital gains made between the start of that tax year (6 April) and their date of arrival - refer to Capital Gains Manual CG10974.

An individual leaving the UK who was not resident and not ordinarily resident in the United Kingdom for at least four out of seven years before the year of departure is not chargeable on capital gains made between the date of departure and the following 5 April - refer to Capital Gains Manual CG10976.

However in considering whether the ‘below £2,000 threshold’ RDRM32110 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm32110) limit applies under ITA07/s809D, the level of un-remitted foreign income and gains for the entire tax year must be taken into account.

Example 1

Niamh comes to the UK on the 27 July 2010. She is resident in the UK for the tax year 2010-2011 but has not been resident in the UK at any time previously.

She has no foreign income in that year.

Niamh’s foreign chargeable gains for the period 6 April to 26 July 2010 total £13,000. No foreign chargeable gains accrue in the period 27 July 2010 to 5 April 2011.

Niamh remits £8,500 of her chargeable gains to the UK in that year.

At the end of the year her total un-remitted foreign chargeable gains are £4,500. Note that even though Niamh’s gains for the period 6 April 2010 to 26 July 2010 are not chargeable to tax by virtue of ESC D2, she still has to include any foreign chargeable gains that arose before she entered the UK in considering the £2,000 threshold.

As Niamh’s un-remitted foreign income and gains are above the threshold she cannot use the remittance basis under s809D. If she wishes to use the remittance basis she will need to claim under ITA07/s809B, and will lose her personal allowances and the annual exempt amount.

From 2013-2014 onwards ESC D2 is no longer applicable and is replaced by the split year treatment in the Statutory Residence Test (SRT). This means that for the overseas part of the split year, the foreign gains accruing in that part of the year can be ignored for the purposes of working out whether the individual has less than £2,000 un-remitted foreign income and gains - the territorial scope exception.

This can be demonstrated as follows.

Example 2

Niamh comes to the UK for the first time on 27 July 2014. She is resident in the UK for the 2014-2015 tax year, Case 5 of split year treatment spplies. She has no foreign income in that year.

Niamh's foreign gains for the period 6 April 2014 to 26 July 2014 total £13,000. No foreign gains accrued in the period 27 July 2014 to 5 April 2015.

Niamh remits £8,500 of her foreign gains to the UK in that year.

At the end of the year her total un-remitted foreign gains are £4,500, which all arose in the overseas part of the split year. This means that Niamh can use the remittance basis under s809D, and will keep her personal allowances and annual exempt amount.

The remittance of £8,500 is not taxable in the UK per TCGA92 s12(1A) See CG25310.