Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 11 May 2023 09:25:23 GMT by Nin Ping Sunny Paul Suen
Greetings to the forum. My question is, suppose a clean capital turns into a mixed fund by virtue of it being held in a time deposit with a foreign bank in the first place, which is subsequently augmented with interest accrued in the deposit after I become a non-domicile UK tax resident. Under such circumstances, can I still "recover" the clean capital from the mixed fund, say by transferring the interest to a different foreign bank account so that the rest of the fund is of the same amount as the original clean capital and kept in the same foreign bank account as before? Your advice and suggestions are greatly appreciated. Thank you.
Posted Wed, 24 May 2023 10:22:48 GMT by HMRC Admin 25
Hi Nin Ping Sunny Paul Suen,
Transferring the interest to another account may prevent the first account (Account A) from becoming a mixed fund, however, you will create a mixed fund account (Account B) that contains the interest accumulated.
You then apply the mixed fund ordering rules covered at RDRM35240 and S809Q of the legislation.
Further guidance in relation to mixed funds rules are at RDRM35210-RDRM35330.

Residence, Domicile and Remittance Basis Manual

Thank you. 
Posted Mon, 31 Jul 2023 09:54:26 GMT by Bernad Yip
I have just relocated to UK. I have an overseas savings account with a bank, which I plan to make it as my clean capital account. The clean capital account generates monthly savings interest. I plan to transfer the exact interest amounts received to a separate income account with the bank. Here are my questions; 1. Does my manual transfer of savings interest from the clean capital account keep my account clean, i.e. I will be able to transfer the fund out of the clean capital account to UK without any tax consequence? 2. I have mistakenly sent £50 out of the clean capital account to UK, which included £1 savings interest generated after my arrival in UK. This was because I have missed my manual transfer of interest to my income account. Do I need to do the self assessment to include the £1 remitted interest? Or, is the £1 considered as exempt property for taxation on remittance? I estimated my savings interest and other foreign income/gains would be less than £2,000 for this coming tax year. Thanks.
Posted Fri, 04 Aug 2023 13:07:59 GMT by HMRC Admin 5
Hi Bernad Yip

Please refer to RDRM35600 onwards for guidance on cleansing a mixed fund.  You can find the link here
Residence, Domicile and Remittance Basis Manual.

Thank you

You must be signed in to post in this forum.