Under the remittance basis of taxation, you pay UK tax on UK income and gains for the tax year in which they arise, but you only pay UK tax on foreign income and foreign gains if and when they are brought (or ‘remitted’) to the UK. In practice, the remittance basis can help to prevent double taxation.
What is income remittance?
Remittances are funds transferred from migrants to their home country. They are the private savings of workers and families that are spent in the home country for food, clothing and other expenditures, and which drive the home economy.
Who pays the remittance basis charge?
The remittance basis charge may be paid from outside the UK direct to HMRC by a person other than the individual (eg by an employer on behalf of an employee). If the employer makes the payment on the employee’s behalf, the amount of the remittance basis charge paid to HMRC may form part of the taxpayer’s income.
Each year, billions of dollars are sent by migrant workers to their home countries. Remittances are funds transferred from migrants to their home country. They are the private savings of workers and families that are spent in the home country for food, clothing and other expenditures, and which drive the home economy.
Do you have to pay tax on remittance basis?
The remittance basis is an alternative tax treatment that’s available to individuals who are resident but not domiciled in the UK and have foreign income and gains. Remittance basis is not available if you are deemed domicile in the UK.
How much does a non dom have to pay on remittance basis?
Non-UK domiciled individuals who are resident in the UK for seven of the previous nine tax years are subject to an annual charge of £30,000 if they wish to claim the remittance basis. This charge increases to £60,000 for non-doms resident in the UK for 12 of the previous 14 tax years.
Who is liable for the remittance basis charge?
Jo remains resident in the UK but not domiciled and in 2010-11 has £200,000 of un-remitted foreign income and gains as well as income from a UK employment. If Jo claims the remittance basis in 2010-11 Jo will be liable for the remittance basis charge of £30,000.
When did the remittance basis change to 2 levels?
From 6 April 2017 the remittance basis charge changed to 2 levels of charge: £30,000 for non-domiciled individuals who have been resident in the UK for at least 7 of the previous 9 tax years immediately before the relevant tax year
