RDRM32340 - Remittance Basis: Accessing the remittance basis: Remittance Basis Charge - Nomination of foreign income and gains: Relevant tax increase - Example 1
From 6 April 2025 it is not possible to use the remittance basis of taxation, however, any foreign income or gains that have arisen to a former remittance basis user prior to this date will continue to be taxed at the usual tax rates if they are remitted to the UK on or after 6 April 2025, subject to any amounts designated under the temporary repatriation facility (TRF) 鈥� see RDRM71000.鈥�
The guidance in this section only applies to tax years up to and including the 2024-25 tax year and remains for reference purposes only.
Example 1
Paulo, a non-domiciled long-term UK resident makes a claim to use the remittance basis in 2015. He is a higher rate taxpayer (40%).聽 He has UK-source employment income of 拢40,000.
His foreign income and gains for the year are as follows:
Relevant foreign earnings (France)聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽 拢40,000
Relevant foreign income (Spain)聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽 拢60,000
Relevant foreign income (France)聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽 拢15,000
Foreign chargeable gains (Germany)聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽聽 拢80,000
Paulo nominates 拢60857 of his foreign chargeable gains, and 拢30,000 of his Spanish RFI, and 拢12,600 of his French RFI.
To determine the relevant tax increase we must complete two calculations. The first calculation (a) is of the total amount of Paulo鈥檚 income tax and capital gains tax actually payable in the year, as a remittance basis user and RBC payer.
The second calculation (b) is the total amount of Paulo鈥檚 income tax and capital gains tax payable in the year less the tax charged less the tax charged on the nominated income and nominated gains.
The relevant tax increase is the total of calculation (a) minus calculation (b)
Calculation (a)
Non-savings income (1)
- 拢31,865 x 20% = 拢12,746
- 拢8,135聽 聽 x 40% = 拢3,254
Savings income (1)
- 拢42,600 x 40%聽 = 拢12,960 (on nominated RFI (2))
Capital gains (1)
- 拢60,857 x 28% = 拢17,040 (on nominated CG(2))
Total income tax and CGT due 拢46,000 (3)
Calculation (b)
Non-savings income (1)
- 拢31,865 x 20% =聽拢12,746
- 拢8,135聽 聽 x 40% = 拢3,254
Total聽 income tax due 拢16,000 (3)
Relevant tax increase:
- is total (a) 拢46,000
- less total (b) 拢16,000
- equals 拢30,000
Notes
- Rates used here for the purposes of this example only; use the rates applying in the relevant tax year.
- This is the foreign income and gains that are nominated, and which are thus charged to tax on the arising basis in the year
- As a remittance basis user, Paulo has no personal allowances due