RDRM31195 – Residence, Domicile and Remittance Basis Manual – HMRC Internal Manual


There are times when a person is unable to transfer income or capital gains to the UK. For example, because of the laws of the jurisdiction from which the income arises or in which an asset is located at the time of disposal; or because of the executive action of its government, or the inability to obtain other currencies.

This could create difficulties for UK residents who are chargeable against their worldwide income and earnings but cannot transfer their overseas income or earnings to the UK. There are therefore special rules which allow non-imputing of unremitted income and gains in the year in which they arise or acquire.

People who choose to be taxed on the basis of transfers are only taxable on overseas income and gains transferred to the UK and therefore generally do not need to claim relief for non-transferable income or gains.

Foreign income and earnings not remitted and below the £2,000 threshold

The treatment of unremitted foreign income and earnings may need to be considered where a person is entitled to the remittance basis because their unremitted income and earnings are less than £2,000. In calculating whether an individual’s unremitted income and earnings are less than £2,000, amounts of unremitted income and earnings may be disregarded if a valid claim for relief is made under ITTOIA05/s842(1) or TCGA92/s279(1).

If circumstances change and the income and gains cease to be unremittable, they are treated as arising or accumulating in the year in which they cease to be unremittable and should therefore be taken into account. account at that time.

Unremitted foreign income and gains – limits on the amount to be remitted

In some cases, there may only be a limit to the amount that can be transferred to the UK. In this case, relief can only be claimed for the amount of foreign income and gains that exceed the limit.

If a person transfers money to the UK from an account which contains capital only, they cannot claim that their entire income and gains for the year are irreversible on the grounds that ‘no income has been paid. Any claim for relief will be limited to the amount of foreign income and gains by which the limit is exceeded.


Hans is a resident of the UK but a non-domiciled person. He has an account in South Africa which contains funds from a South African lottery win. This capital is separated from its foreign income and gains in a bank account specially designated for this purpose.

In 2008-2009, Hans elected not to use the remittance basis, so he is taxed on the remittance basis. He is applying for relief for unremitted income. In 2008-2009, Hans had an income in South Africa equivalent to £34,000. However, due to South African currency restrictions, he can only transfer the equivalent of £29,000. During this year, Hans transfers the equivalent of £21,000 to the UK from his central account.

Hans cannot claim that the full £34,000 is non-refundable. Hans is chargeable on the basis of £29,000. Exemption from UK tax can only be claimed on unpaid income of £5,000 (£34,000 – £29,000).

The fact that Hans chose to return capital instead of income is irrelevant. Relief is only due in respect of the amount of income which cannot be remitted and which corresponds to the amount of income in excess of the ceiling of the South African monetary regulations.


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