RDRM32015 - Remittance Basis: Accessing the remittance basis: Claiming the remittance basis: Deemed domiciled
Broadly speaking, prior to 6 April 2017 the following types of UK resident individuals could use the remittance basis:
- those whose domicile of origin was overseas and who had not acquired a UK domicile of choice
- those who had been born with a UK domicile of origin but had acquired a domicile of choice (or dependency) overseas
From 6 April 2017 this is no longer automatically the case. Individuals born in the UK with a UK domicile of origin will be taxed on the arising basis on their worldwide income and gains, (Condition A individuals). Even if they satisfy all the other conditions of s809D ITA’07 they will not be able to claim the remittance basis.
Likewise, individuals who have been resident in the UK for at least 15 of the previous 20 tax tears immediately preceding the relevant tax year are no longer eligible to claim the remittance basis, (Condition B individuals).
Example
Jamal, who was born in the UK and had a UK domicile of origin, moved to New Zealand aged 20, remaining there for many years and acquiring a domicile of choice there.
He then came back to the UK to work on a 2 year secondment from his employer in New Zealand. Becoming resident in the UK. Jamal intends to return home to New Zealand after his secondment.
If he had returned to the UK prior to 6 April 2017 Jamal would be treated as non-UK domiciled and would be able to use the remittance basis for the tax years from his arrival up to 2016-2017. For 2017-2018 and subsequent tax years Jamal will be taxed on the arising basis, because he was born in the UK and has a UK domicile of origin, so he can’t claim the remittance basis.
If Jamal returns to the UK after 6 April 2017 he will be treated as UK domiciled from the date he returned to the UK. He will be unable to use the remittance basis and will be taxed on the arising basis on his worldwide income and gains.