Background Note
23.Individuals who are resident but not ordinarily resident or not domiciled in the UK can choose to use the remittance basis of taxation whereby they are required to pay UK tax on their offshore income and gains only to the extent which they are brought - or remitted - into the UK.
24.Section 25 and Schedule 7 of FA 2008 introduced significant changes to the remittance basis which came into effect from the start of the 2008-2009 tax year.
25.During the passage of Finance Bill 2008 the Government gave an undertaking that HM Treasury and HM Revenue & Customs officials would consult with external stakeholders following Royal Assent to review the legislation to ensure it operated as intended and to identify areas where it could be clarified or improved. The majority of the changes introduced in Finance Act 2009 arise from this consultation.
26.The Act also clarifies the definition of a relevant person and provides a statutory rule for determining the value of a remittance where property forming part of a larger set is remitted to the UK. Both changes are intended to prevent potential abuse of the remittance basis rules.
