RDRM35730 - Remittance basis: Mixed funds: Cleansing mixed funds: Special mixed funds

As with a regular mixed fund, a special mixed fund could also have been cleansed, in the same way as any other bank account, with that cleansing taking place with the specified 2 year window ending on 5 April 2019. The same qualifying conditions apply.

Individuals could also have cleansed what was a previously a special mixed fund account which no longer qualified for the special mixed fund rules.

Example

Kenzie came to the UK from the USA on 10 May 2014 to work. Her contract includes earnings from duties performed outside the UK as well as earnings from duties performed in the UK (Section 26 and Section 15 within ITEPA 2003). She nominates a special mixed fund, into which her earnings are placed and meets the special mixed fund conditions (see RDRM35800 onwards). This account is used for the 3 years Kenzie claims OWR (overseas workday relief).

At the end of these 3 years her account, (Account 1), contains the following:

  • 2014-2015 £2 million disposal of employment related securities
  • 2014-2015 £400,000 S15 general earnings
  • 2014-2015 £200,000 S26 general earnings
  • 2015-2016 £1.5 million S15 general earnings
  • 2015-2016 £750,000 S26 general earnings
  • 2016-2017 £2 million S15 general earnings
  • 2016-2017 £1 million S26 general earnings

In 2017-2018 Kenzie sets up 2 new bank accounts, nominating the transfers into these accounts under the cleansing provisions. She leaves the £2 million disposal in the original account and makes the following transfers:

Account 2

  • £400,000 S15 from 2014-2015
  • £1.5 million S15 from 2015-2016
  • £2 million S15 from 2016-2017

Account 3

  • £200,000 S26 from 2014-2015
  • £750,000 S26 from 2015-2016
  • £1 million S26 from 2016-2017

Kenzie has successfully cleansed her special mixed fund account.