RDRM31040 - Remittance Basis: Introduction to the Remittance Basis: Overview of the Remittance Basis regime: What income and gains does the remittance basis apply to?

For individuals who are UK domiciled but not ordinarily resident (NOR), the remittance basis only applies to foreign income.

The remittance basis applies to both foreign income and foreign capital gains for individuals who are not domiciled within the UK (ND).

From 6 April 2013 the concept of ordinary residenc has been removed from the statue for most tax purposes. For tax years 2013-2014 onwards the remittance basis can only be claimed by people who are not domiciled in the UK.

From 6 April 2017 the remittance basis will not apply to either an individuals’ foreign income or foreign capital gains if they are deemed domiciled in the UK.

For tax years 2012-2013 and earlier, there is a key difference between NORs and NDs in respect of capital gains. Any capital gains arising to individuals who are domiciled within the UK but are NOR cannot be taxed on the remittance basis, even if the individual uses the remittance basis in respect of their foreign income.

Note: An individual who is UK domiciled but NOR and who claims the remittance basis still loses their capital gains Annual Exempt Amount. (refer to RDRM32040).

There are also differences in what is classified as ‘relevant foreign earnings’ depending on whether the employees is NOR or ND. These are discussed at RDRM31120 - also refer to the Employment Income Manual EIM40001 onwards.