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Non-Dom's and remittance basis

We have a non-UK domiciled but UK resident client who in 2010/11 has a capital gain of some £500,000 on the disposal of an overseas property which has not been remitted to the UK. My questions are:

1. will claiming the remittance basis for 2010/11, and paying the £30,000 remittance basis charge (RBC), avoid paying Capital Gains Tax (CGT) on the overseas gain in that year?

2. If the overseas gain is remitted to the UK in a subsequent year is that then taxable in the UK or is UK CGT liability avoided in full on the £500,000 (subject to the RBC)?



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By Hansa
16th Apr 2012 19:34

I may be shot down ....

1.  I think by definition that if the client is on the £30k scheme, what is not remitted, is not taxable.

2.  (the one where I may be shot down) ... I have generally worked on the basis that  

"Income" relates to "new money" acquired in the current year,


"Capital" relates to moneys acquired in prior years (ie it was income in the past, but is now capital).   

Following this through .... in

2012/13 Mr X (a nom-dom) 'earns' £500k but being on the £30k scheme discharges his entire potential UK tax  liability (including CG abroad) by payment of that £30k.

In 2013/14 Mr X's income drops to £100k and he decides not to be on the £30k scheme and brings in £500k (to buy a flat for example).  I would argue that this £500k is a capital remittance of funds already in his possession at the beginning of the tax year and NOT income. 

The £30k scheme is not dissimilar to many such schemes around Europe and beyond (often  referred to as HINWI schemes designed to attract wealthy outsiders) and the differentiation between income and capital is almost always accepted as described above.


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By charlb
17th Apr 2012 09:54

be careful...

1. Generally paying the 30k RBC allows you chose the remittance basis which effectively means you only pay tax on any foreign earnings / gains that you remit to the UK. So, if the PROCEEDS of the sale are not remitted then there should be no further UK tax liability for the year other than the 30k RBC.

However, please bear in mind that you need to nominate income and / or capital that is covered by the RBC in which case depending on his other income / gains you may want to nominate the gain made on the property or you might not depending on whether he envisages remitting any of the proceeds and depending on whether he has other foreign income / gains arising to him since 2008 that he has not paid UK taxes on.

It's a complex area however HMRC guidance is quite good - have a look at


2. If the gain made on the sale is not nominated then a remittance of the proceeds in any subsequent year will create a UK tax liability. If the gain however is nominated and there are no other un-nominated income / gains that have arisen since April 2008 then providing that the 30k RBC covered the potential UK tax liability of the gain then the proceeds could be remitted without giving rise to an additional UK tax liability. 


Take care when considering the original capital used to purchase the house as it may be that this was not "clean" in which case a remittance of the sale proceeds may trigger additional tax consequences. 

I would also just check if there is anyway of getting PPR relief for the gain.


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17th Apr 2012 15:20

only for the year

Just to add to the previous comments

The gain will not be chargeable in the year if not remitted and the £30,000 is paid.

However, if the gain is subsequently remitted then unless it is nominated income then it will be a taxable remittance, this is where the UK differentiates between Income, Capital and Gains.

Given the size of the gain it seems likely that the client will be borderline for the remittance basis in future years as well, just based on income arising on the gain, let alone any original capital.

I would think a planning session with the client was called for......


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