RDRM32210 - Remittance basis: accessing the remittance basis: long term UK residents: long-term residents and the remittance basis charge - overview

The remittance basis charge (RBC) is payable by ‘long-term UK residents’ who are aged 18 or over at the end of the tax year, and who claim the remittance basis of taxation in respect of foreign income and or gains arising in the relevant year. From tax year 2012-2013 there were two levels of charge and from 2015-2016 there were three levels of charge. The amount payable is determined by the number of years that the remittance basis user has been resident in the UK. (See RDRM32220)

‘Long-term UK residents’ are individuals who have been tax resident in at least seven out of the nine tax years preceding the current or ‘relevant’ tax year

The remittance basis charge is an annual charge of either

  • £30,000 for individuals who have been tax resident in at least seven out of the nine preceding tax years,
  • £60,000 for individuals who have been tax resident in at least twelve out of the fourteen preceding tax years (from 2012-2013 to 2014-2015 this was £50,000)
  • £90,000 for individuals who have been resident in at least 17 out of the 20 preceding tax years (for 2015-2016 and 2016-2017 only).

Between 2008-2009 and 2011-2012 a single remittance basis charge of £30,000 applied where the individual had been resident in the UK in at least seven out of the nine preceding tax years.

The third tier of RBC, (those resident for 17 of the preceding 20 tax years), will as a consequence of the deemed domicile changes, no longer be applicable from 6 April 2017. This is because all those who fall within this tier will now be deemed domiciled in the UK. From 6 April 2017 there are only two tiers of charge - £30,000 or £60,000.

Example

Blanche, a non-UK domiciled individual, has been resident in the UK since the 1999-2000 tax year, and has always claimed the remittance basis.

From 6 April 2008 she paid the £30,000 RBC, this changed to £50,000 from 6 April 2012 to 5 April 2015, (when the higher charge was introduced).

From 6 April 2015 Blanche paid £60,000 RBC, and from 6 April 2016 she paid the £90,000 RBC. The final year Blanche will pay the RBC is 2016-2017, as she will be treated as deemed domiciled from 6 April 2017. Blanche has been in the UK for more than 15 of the last 20 tax years, and meets Condition B of the deemed domiciled legislation.

The remittance basis charge is an additional tax charge, that is, it is paid in addition to the UK tax liability for the year on any foreign income and gains remitted to the UK.

Whatever level of remittance basis charge is payable it is paid on nominated foreign income and gains. The charge is either income tax, capital gains tax or a combination of the two.

The remittance basis charge is payable through and collected by the SA regime, and an SA tax return must be filed. The SA109 ‘Residence, remittance basis etc’ supplementary return should be completed and filed for this purpose. Also refer to RDRM32020 ‘Making a claim’.