RDRM33270 - Remittance Basis: Identifying Remittances: Condition C - Gift Recipients: Remittances - enjoyment by a relevant person ignored
Source: gov.uk (2025-04-07)


Incidental Enjoyment (#IDATM5OG)

Full Consideration given (#IDAIN5OG)

Access by general public (#IDA4N5OG)

Many of the conditions for a remittance to occur under Condition C require enjoyment of property, a service, or a benefit by a relevant person. However, in certain circumstances, enjoyment by a relevant person is disregarded, which means that there will not be a remittance under Condition C, if there otherwise would be (section 809N(9) ITA 2007).

Incidental Enjoyment

Each case will depend on its particular facts, but broadly, enjoyment by a relevant person is disregarded where the property or service is enjoyed by the gift recipient virtually to the entire exclusion of all relevant persons, that is, the gift is genuine and any enjoyment by a relevant person is incidental (section 809N(9)(a)). In the case of an enjoyment of a benefit, enjoyment by a relevant person is disregarded if it is both negligible and the benefit is also enjoyed by non-relevant persons (section 809N(9)(aa)).

For example, a minor child may derive benefit from living in the UK with his parents in a house that was purchased using offshore funds gifted by his grandfather (a former remittance basis user) to his father, for his father’s own use. It is normal for a young child to live with his parents and therefore, in most cases, no advantage over minor children generally is obtained. In this type of circumstance HMRC would generally accept that the minor child’s enjoyment of the house was merely incidental to that of his father.

Example 1

James, a remittance basis user, gives his sister Julia £10,000 of his foreign income. This money is qualifying property of a gift recipient. The following year Julia brings the money to the UK to purchase a car for £10,000.

James visits Julia two or three times a year and while there he occasionally uses her car to run errands. Otherwise, the car is used only by Julia. Although there is enjoyment by a relevant person (James) of qualifying property (the car acquired with the foreign income), the enjoyment is marginal and may be disregarded. James has not made a taxable remittance.

The year after, although the car is registered in Julia’s name, Julia gives James the car to use every weekend and also for a long-distance journey every second month. James’ enjoyment of the car is no longer marginal. James has made a taxable remittance.

Full Consideration given

Enjoyment by a relevant person is also ignored where full consideration, in money or money’s worth, is given by a relevant person for the enjoyment (section 809N(9)(b)).

Broadly ‘full consideration’ in this context is the amount of consideration that would be expected to be paid in a similar transaction for the enjoyment, if it was a 'bargain at arm’s length’.

Example 2

Instead of allowing James to use her car as in example 1 above, Julia decides not to use her car anymore, and so gives it to James and transfers ownership to him.

James transfers to Julia a £7,500 holiday in return which is accepted as being ‘full consideration’ in money’s worth, as the car has depreciated in worth in the intervening 12 months, and so James has not made a taxable remittance.

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Access by general public

Enjoyment is ignored if the property, benefit or service is enjoyed by a relevant person in the same manner as it may be enjoyed by the general public or a section of the general public (section 809N(9)(c)).

Example 3

Alison, a remittance basis user, purchases several first edition books in Japan for £30,000 using her relevant foreign earnings. She gives them to Katie, her god-daughter. After a few months Katie sells these books for £45,000 and purchases a set of art prints for £55,000 from a London studio. The art prints are qualifying property (up to £30,000) because they derive indirectly, and in part, from the property (the books) that Alison gave to Katie (the gift recipient).

Katie is approached by the local art gallery which is mounting an exhibition and agrees to loan them the set of prints. Alison attends the exhibition, paying a reduced entry fee at the door because she is a member of the local art institute. There is no remittance under Condition C because Alison is enjoying the property in the same manner as the general public, and on the same terms as a section of the general public (the members of the art institute).

Katie later loans the prints free of charge to a business run by Alison’s husband Peter, who displays them in his private office in Newcastle. Here the enjoyment by a relevant person (Peter) is not in the same way or under the same terms as the general public, so there is a taxable remittance under Condition C.