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Finance Act 2010

Section 33:  “Relevant Person”

Summary

1.Section 33 provides for a minor amendment to the definition of a “relevant person” for the purposes of the remittance basis of taxation.

Details of the Section

2.Subsections (1) to (3) amend the definition of a relevant person in section 809M of the Income Tax Act 2007 to include subsidiaries of non-resident companies which would be close companies if they were resident in the UK.

3.Subsection (4) provides that this amendment comes into force on 6 April 2010.

Background Note

4.Individuals who are resident but not ordinarily resident or not domiciled in the UK can choose to use the remittance basis of taxation. The remittance basis is an alternative method of taxation which requires qualifying individuals to pay UK tax on their offshore income and gains only to the extent which they are brought - or remitted - into the UK.

5.Section 25 of and Schedule 7 to the Finance Act (FA) 2008 introduced significant changes to the remittance basis which came into effect from the start of the 2008-09 tax year. Minor amendments to the rules were made by sections 51 and 52 of and Schedule 27 to FA 2009.

6.This section makes a further minor amendment in order to prevent potential abuse of the rules. It makes clear that the definition of a relevant person includes subsidiaries of non-resident companies which would be close companies if they were resident in the UK.

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