Remittance basis

I am a non-UK domiciled but UK tax resident in this tax year. I have foreign interest income and foreign dividend for my personal accounts, and plan to report to HMRC on arising basis. At the same time, I own an unincorporated business providing consultancy service. As the profit of the unincorporated business is expected to be below 2000 sterlings, which will not be remitted to the UK, I plan to use remittance basis for the gain of this unincorporated business. Can different treatments be applied (arising basis for dividend/interest income, but remittance basis for unincorporated gain) in my case? Please advise.

Hi
If you are using the arising basis, you must include your worldwide income in the year that this applies.
You can opt to move the the remittance basis on the next tax year.
You cannot use both basis in the one tax year.
Thankyou.

I found this example in HMRC website: Example 1 Jason has been UK resident for 12 years; he remains non-domiciled in the UK. In 2012-2013 Jason has total foreign income and gains of £80,000 for the tax year. During that tax year he brings £78,500 of it to the UK. This money is liable to UK tax upon remittance. This leaves £1,500 ’un-remitted’ (also refer to RDRM31190 exchange rates). As this is less than the £2,000 threshold he can use the remittance basis without making a claim under ITA09/s809B for the relevant tax year if he so wishes. He does not lose his personal allowances, or his Annual Exempt Amount. Although he is a long-term resident he is not liable to the Remittance Basis Charge. However Jason will likely need to complete a self-assessment Tax Return as the £78,500 remittance to the UK will need to be returned. My question is: how the £78500 is taxed in the above case? Remittance basis as well and subject to RBC? Or treat as if UK income/gain. Please advise.

Hi J Chen,
As its being remitted he won't be subject to the remittance basis charge.
The income will be declared on the foreign page of the tax return.
See guidance here:
2. Completing the ‘Foreign’ pages

Thank you. 

 

1. I do not need to file foreign dividend/interest income if it is below the corresponding tax allowance, right? 2. To be more precise on my original case. I am a non-UK domiciled but UK tax resident in this tax year, and I am basic tax payer. I have the following foreign income and gains in the coming tax year (2023/2024): a) I have foreign interest income of £200 and nil domestic interest income. The foreign income is remitted to the UK. b) I have foreign dividend income of £500 and domestic dividend income of £200. The foreign income is remitted to the UK. c) I own an unincorporated business providing consultancy service. The annual profit is expected to be below £2,000. The profit is not remitted to the UK. Question: Can I use the the interest/dividend tax allowance for foreign interest/dividend income? Shall I use remittance basis for the unincorporated profit as the profit is under £2000 in the same year?

Hi,

A self assessment tax return is required where you are in receipt of any foreign dividends or bank interest.  
If your foreign dividends are below £2000.00, then you can declare this in box 6 of SA100.  You would need to submit a self assessment tax return, to claim the remittance basis.  
Have a look at the guidance at RDR1  Residence, domicile and the remittance basis: RDR1
to see if the remittance basis is more beneficial to you or not.

Thank you