Part 14

Income tax liability: miscellaneous rules
Chapter A1

Remittance basis

Remittance of income and gains: transfers from mixed funds

Special mixed fund rules for certain employment cases
809RA
1
This section applies if—
a
an individual has general earnings from an employment for a tax year,
b
those earnings include both general earnings within section 15(1) of
ITEPA
2003 (“section 15(1) earnings”) and general earnings within section 26(1) of that Act (“section 26(1) earnings”),
c
at least some of the section 15(1) earnings, or sums deriving (wholly or in part, and directly or indirectly) from at least some of the section 15(1) earnings, are paid into an account in that tax year at a time (a “relevant time”) when the account is a qualifying account of the individual, and
d
at least some of the section 26(1) earnings, or sums deriving (wholly or in part, and directly or indirectly) from at least some of the section 26(1) earnings, are also paid into the account in that tax year at a relevant time.
2
If this section applies, the composition of each transfer made from the account in that tax year at a relevant time is to be determined as follows—
- Step 1
Suppose that all the condition A transfers made from the account in the tax year at a relevant time had been a single transfer made from the account at the end of the tax year.
- Step 2
Suppose that all the other transfers made from the account in the tax year at a relevant time had been a single offshore transfer made at the end of the tax year immediately after the single transfer mentioned in step 1.
- Step 3
Applying those suppositions—
  1. find under section 809Q(3) the extent to which the single transfer mentioned in step 1 is of the individual's income or chargeable gains, and
  2. find under section 809R(4) the content of the single offshore transfer mentioned in step 2.
- Step 4
Each transfer made from the account in the tax year at a relevant time is to be treated as containing the specified proportion of each kind of income or capital contained in the relevant deemed transfer.“The specified proportion” is the amount of the transfer divided by the amount of the relevant deemed transfer.“The relevant deemed transfer” is—
  1. if the transfer is a condition A transfer, the single transfer mentioned in step 1, and
  2. otherwise, the single offshore transfer mentioned in step 2.
3
Subsection (2) applies in determining the composition of a transfer for the purposes of sections 809Q and 809R but it does not otherwise affect the date on which a transfer is considered to occur for the purposes of this Chapter.
4
If the tax year is the tax year in which the account becomes a qualifying account, for the purpose of applying section 809Q(3) in relation to the single transfer mentioned in step 1 of subsection (2), treat the part of the tax year falling before the qualifying date for the account as a separate tax year.
5
If the account ceases to be a qualifying account of the individual during the tax year other than as a result of a breach of the deposit rule—
a
subsection (2) has effect as if references to the end of the tax year were to the end of the day on which the account ceases to be a qualifying account, and
b
for the purpose of applying section 809Q(3) in relation to the single transfer mentioned in step 1 of subsection (2), treat the part of the tax year falling after the day mentioned in paragraph (a) as a separate tax year.
6
A transfer from the account is a “condition A transfer” if and to the extent that—
a
condition A in section 809L is met, and
b
either—
i
the property or consideration for the service is (wholly or in part), or derives (wholly or in part, and directly or indirectly) from, the transfer, or
ii
the transfer, or anything deriving (wholly or in part, and directly or indirectly) from the transfer, is used as mentioned in section 809L(3)(c).
7
A transfer from the account is an “other transfer” if and to the extent that it is not a condition A transfer.
8
Treat a transfer as an “other transfer” if and to the extent that, at the end of the tax year—
a
it is not a condition A transfer, and
b
on the basis of the best estimate that can reasonably be made at that time, it will not become a condition A transfer.
9
If the account ceases to be a qualifying account of the individual during the tax year other than as a result of a breach of the deposit rule, subsection (8) has effect as if the reference to the end of the tax year were to the end of the day on which the account ceases to be a qualifying account.
10
“Qualifying account” and “the qualifying date” for an account are defined in section 809RB.
11
For the purposes of this section and sections 809RB to 809RD—
a
“
employment
” is to be read in accordance with section 4(1) of
ITEPA
2003, and includes an office (as read in accordance with section 5(3) of that Act),
b
whether general earnings are “for” a tax year is to be determined as for the purposes of the employment income Parts of
ITEPA
2003 (see section 3(2) of that Act),
c
a reference to anything “paid into” an account includes anything credited to the account by whatever means, and
d
references to a breach of the deposit rule are to be read in accordance with section 809RC.
Pt. 14 Ch. A1 modified by 2003 c. 1, s. 41F(8) (as substituted (6.4.2015) by Finance Act 2014 (c. 26), Sch. 9 paras. 5, 47 (with Sch. 9 para. 48))
Ss. 809RA-809RD inserted (with effect in accordance with Sch. 6 para. 8 of the amending Act) by Finance Act 2013 (c. 29), Sch. 6 para. 6
Pt. 14 Ch. A1 modified by 2005 c. 5, s. 643F(4) (as inserted (with effect for the tax year 2018-19 and subsequent years) by Finance Act 2018 (c. 3), Sch. 10 paras. 11, 21(1) (with Sch. 11 para. 22))
Pt. 14 Ch. A1 modified (with effect in accordance with art. 1(2)(3) Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 19(3)
Pt. 14 Ch. A1 inserted (21.7.2008 with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 1 (with Sch. 7 paras. 85-89)
Pt. 14 Ch. A1 modified by 2005 c. 5, s. 643N(3)(4) (as inserted (with effect for the tax year 2018-19 and subsequent years) by Finance Act 2018 (c. 3), Sch. 10 paras. 11, 21(1) (with Sch. 11 para. 22))
Pt. 14 Ch. A1 modified (temp.) (for the tax years 2025-26, 2026-27 and 2027-28) by Finance Act 2025 (c. 8), Sch. 10 para. 18(1)(2)
Ss. 809L-809Z6 applied by 2005 c. 5, s. 643I(9) (as inserted (with effect for the tax year 2018-19 and subsequent years) by Finance Act 2018 (c. 3), Sch. 10 paras. 11, 21(1) (with Sch. 11 para. 22))
Ss. 809L-809Z6 applied by 2005 c. 5, s. 643A(6) (as inserted (with effect for the tax year 2018-19 and subsequent years) by Finance Act 2018 (c. 3), Sch. 10 paras. 11, 21(1) (with Sch. 11 para. 22))
Pt. 14 Ch. A1 modified by 2003 c. 1, s. 41A(8) (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 22)
Pt. 14 Ch. A1 modified by 1988 c. 1, s. 762ZB(3) (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 98 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 94)
Pt. 14 Ch. A1 modified by 1992 c. 12, s. 87B(3) (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 115 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 108 (with Sch. 7 paras. 116-119))