RDRM31060 - Remittance Basis: Introduction to the Remittance Basis: Overview of the Remittance Basis regime: Glossary - Key definitions
Source: gov.uk (2025-04-07)


Important Note on Interpretation

This glossary is intended to be used as a compilation of practical working descriptions of the terms contained in it, for those who may not be familiar with them.

It is not a list of legal definitions used by HMRC or in the legislation.

The descriptions have been drawn from a range of media, and alternative, although similar, descriptions may exist. No legal reliance may be placed on this list.

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Glossary of key definitions

Arising Basis

The basis of UK taxation for UK residents. It means that UK income and capital gains tax is due on all worldwide income and gains as they arise or accrue.

Business Investment Relief

An investment made by a relevant person using their foreign income or gains (or something derived from them) in a qualifying company from 6 April 2012. See RDRM34300 onwards.

Connected Operation

An operation which is effected with reference to a qualifying disposition RDRM33440, or with a view to enabling or facilitating a qualifying disposition.

Domicile

A general law concept that connects an individual to a system of personal law in the territory in which they have their ‘permanent home’. For adults this is normally the territory in which they intend to live permanently or indefinitely. Refer to RDR1 for further details.

Domicile is distinct from nationality and residence.

From 6 April 2025, the concept of domicile as a relevant connecting factor in the tax system has been replaced by a system based on tax residence.

Domicile (deemed)

An individual who met either Condition A or Condition B of the deemed domicile provisions, and so was taxable on the arising basis on their worldwide income.

Exempt Property

Exempt property includes, among other things: clothing, footwear, jewellery and watches purchased out of relevant foreign income (not gains) that is brought to the UK for personal use.

Any property that is brought to the UK temporarily, for repair or has a notional value of less than £1,000.

Foreign Chargeable Gains

Chargeable gains accruing from the disposal of an asset which is situated outside the United Kingdom.

Foreign Income

Income arising from outside the UK, e.g. foreign employment income, foreign pensions.

Foreign Securities Income

This concept applies to remittance basis users only, in respect of employment-related securities income. Foreign securities income (‘FSI’) is the amount of employment-related securities income that is foreign.

As with earnings from foreign employment, the definition is slightly different for employees who are NOR and employees who are ND.

Foreign Specific Employment Income

This term is used in the remittance basis rules to refer to any part of an individual’s employment income of a tax year that is foreign securities income. From 6 April 2011 this includes ‘Taxable Specific Income’ when that is employment income provided through third parties.

Gift Recipient

A person, other than a relevant person, to whom the individual makes a gift of money or other property that is income or chargeable gains of the individual, or derives from income or chargeable gains of the individual.

Insufficient Nomination

This term is not within the legislation, but has been coined by HMRC to describe the situation when an individual who was claiming the remittance basis, and was liable to pay the remittance basis charge had not nominated enough of their foreign income or gains on their SA return to produce either the £30,000 or the £60,000 charge. The remittance rules provided an ‘automatic’ additional nomination of income to ensure the charge stayed at either £30,000 or £60,000.

Long Term UK Resident

An individual who is resident in the UK in the current tax year and was also resident in at least seven of the immediately preceding nine tax years.

Mixed Fund

An offshore asset that is, represents, derives from or contains more than one type of income or capital, and/or income and capital from more than one tax year.

Special rules apply to determine the nature of remittances where there is a remittance of the whole or part of a mixed fund, or of any property derived from the mixed fund.

Nominated Income and Gains

The foreign income or gains of a tax year that a long-term resident remittance basis user ’nominates’ and on which they paid the income tax or capital gains tax that constituted the remittance basis charge for that tax year. These must have been reported on their Self Assessment tax return for that year.

Ordinarily Resident

Someone who is resident in the UK year after year will usually be ordinarily resident here. The concept of ordinarily resident no longer exists after the introduction of the Statutory Residence Test (SRT), from 6 April 2013 (see RFIG20000 (https://www.gov.uk/hmrc-internal-manuals/residence-and-fig-regime-manual/rfig20000) onwards)

Refer to HMRC6 for earlier years.

Qualifying Disposition

The disposal of money or other property that is, or derives from, income or chargeable gains of the individual, to someone else in circumstances where property of that other person is somehow enjoyed by a relevant person or used to provide a service in the UK. The term is used in relation to a connected operation.

Relevant Debt

An offshore debt relating to property in the UK or the provision of a service in the UK, serviced from foreign income and/or gains.

Relevant Person

A relevant person is:
- the individual him or herself.
- the individual’s spouse or civil partner, or a couple living together as if they are spouses or civil partners
- the individual’s children or grandchildren under 18 years of age - this includes children and grandchildren of their spouse or civil partner
- trustees of a settlement, if the individual or another relevant person is a beneficiary of the trust
- close companies in which a relevant person is a participator (for example a shareholder)
The above does not include all categories of relevant person. For a full definition go to section 809M ITA 2007.

Under the legislation, taxable remittances of an individual’s income or gains may be made by, and/or for the benefit or enjoyment of a relevant person, and this will result in a tax charge on the individual.

Relevant Tax Increase

This term is used in relation to computing the remittance basis charge that was payable by long-term residents. Broadly, it is a calculation that is the difference between the total amount of:

income tax and capital gains tax payable by a long-term resident remittance basis user subject to the remittance basis charge for the relevant tax year

less

income tax and capital gains tax that would be due from a remittance basis user if they did not have to pay tax on their nominated income and gains.

Relevant Tax Year

The term is mostly used in relation to special ordering rules that may apply in certain circumstances; for example

When computing the relevant tax increase and identifying whether a nomination of income or gains is needed in a relevant tax year.

When identifying the nature and amount of a ‘transfer’ from a mixed fund. The year in which the transfer occurs is the ‘relevant tax year’.

When nominated income and/or gains are remitted. The first time the rules apply, the relevant tax year is the year in which the nominated income or gains are remitted.

The year which is the ‘relevant tax year’ in any situation will depend on which legislative provision is being considered.

Remittance Basis

An alternative basis of taxation which could be used only by individuals who are resident in the UK but not domiciled in the UK up to 5 April 2025.

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).

Prior to 6 April 2013 individuals who were resident but not ordinarily resident in the UK could also use remittance basis, but this concept has been removed from the legislation from this date.

For individuals who were using the remittance basis, their foreign income and foreign chargeable gains (for non-UK domiciled individuals only) are subject to UK income tax or capital gains tax only when ‘remitted’ to the UK.

Remittance Basis Charge

An annual tax charge of either £30,000 or £60,000 that was payable by UK resident individuals who claimed the remittance basis, and who, in the year of claiming were:
- aged 18 or over
- have either been resident in the UK for at least seven of the last nine tax years when the £30,000 charge applies (long-term residents)
- or have been resident in the UK for at least 12 of the last 14 tax years when the £60,000 charge applies
- have £2,000 or more un-remitted foreign income and/or gains arising/accruing in the tax year
Prior to the introduction of deemed domicile there was a third level of charge - £90,000 for those individuals who had been UK resident in at least 17 of the previous 20 UK tax years. This applied for the 2015-16 and 2016-17 tax years only.

Residential Property

A building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use. ’Building’ includes part of a building.

Land that is or forms part of the garden or grounds of a building above, (including any building or structure on such land). This includes an interest in or right over land.

Special Mixed Fund

An account that was held by an individual who was entitled to claim Overseas Workday Relief under the pre-6 April 2025 rules and who fulfilled certain conditions. See RDRM35800 onwards.

Transitional Provisions

Rules introduced in Finance Act 2008 Schedule 7 to deal with the move from the previous legislation dealing with the remittance basis up to and including 2007-2008 to the legislation applying from 2008-2009.

Un-remittable Income

This term is used at section 841 ITTOIA 2005 and is largely relevant to taxpayers using the arising basis. It refers to any foreign income which is not able to be brought into the UK because of exchange controls, or a shortage of foreign currency in the foreign country.

It should not be confused with the term ‘un-remitted foreign income or gains’.

Un-remitted Foreign Income and Gains

Any foreign income or gains of a remittance basis user that arises (or accrues) during the tax year, but which remains abroad and is not brought into the UK or otherwise regarded as ‘remitted’.

These foreign income or gains may be un-remitted because, for example, the individual chooses to use or to leave the money offshore.