INTM602060 - Transfer of assets abroad: Non-domiciled individuals: The income charge - the income affected by domicile status

For the purpose of the transfer of assets income charge, domicile status can only affect foreign income, and then only where that income is not received in or remitted to the UK.

Whether income is, or is not, foreign income is a matter to be discerned from the facts and any relevant law and will usually be a consideration before applying the transfer of assets legislation. But the type or category of income of the person abroad need only be considered where domicile status is claimed to make a difference to the amount that would otherwise be charged under the transfer of assets provisions.

In considering, where it is relevant to do so, what the type of income is, you must look at the income in the hands of the person whose income it actually is; that is, in the hands of the person abroad.

It may be appropriate to consult with relevant specialists to determine the true character of any income potentially within the scope of the transfer of assets provisions. For example, where it is suspected that arrangements have been entered into in an attempt to exploit domicile status by creating what is described as foreign income.