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Posted Thu, 16 Feb 2023 14:30:44 GMT by mwgentry
Hello, I have been in the UK for several years and have always filed under the remittance basis, however I am now moving to the arising basis. I plan to sell some overseas stock shares resulting in a capital gain, which would be subject to UK tax under the arising basis (although the value will be less than the personal allowance.) These shares are held in a mixed fund, containing gains, interest, dividends, etc. from prior tax years during which I was claiming the remittance basis, so did not need to claim the values via self assessment. I plan to transfer the amount of the capital gain to the UK. I have read all the guidance but there are two questions for which I cannot find the answer: 1) Provided the amount I transfer to the UK is equal to or less than my taxable capital gain, do I need to be concerned with the fact that the amount came from a mixed fund? I am aware this would have been an issue had I claimed the remittance basis, but I am unsure if any ordering rules need to be applied under the arising basis. 2) Does the concept of 'overseas transfer' come into play for any non-UK transfers out of that account which occur in the relevant UK tax year? Again, I am aware of how overseas transfers must be taken into account under the remittance basis but I am unsure if this is a concern under the arising basis. Thank you in advance for your help.
Posted Thu, 23 Feb 2023 12:17:33 GMT by HMRC Admin 2

If you use the arising basis, then you will be taxable in the UK, on your world wide income in the tax year it arises.  

All foreign income must be declared, even in situations, where the capital gains annual exempt allowance covers any gains, meaning there is no capital gains tax to pay.

If you were resident in the UK, when the incomes arose and you chose not to remit the income at that time, then they will be taxable in the tax year in which you do remit them to the UK.  

Where your bank account holds a mixture of different incomes and gains, it would be up to you to declare the sum being remitted and what type of income or gain it is.  

Any costs or fees incurred in transferring currency to or from pounds sterling, in order to remit to the UK, cannot be claimed as an expense. This is a cost you have to pay yourself.

Thank you.
Posted Mon, 27 Feb 2023 10:06:07 GMT by mwgentry
Thank you for your response, this is very helpful. However, I would still like to confirm one point, related to the second question in my original post. An example of what I am asking: Let's assume I have a capital gain of £2,000, subject to UK tax under the arising basis in the 2022/23 tax year, in a US-based account which also contains unremitted income and gains from various other prior years in which I was claiming the remittance basis. Let's also assume I have outgoing transfers from that account to non-UK payees in the amount of £200 in the 2022/23 tax year. My question is whether those £200 payments to non-UK payees have any impact on the amount I can bring to the UK. Meaning, can I bring the full £2,000 capital gain subject to UK tax to the UK, or do I need to reduce it by the outgoing payments and only bring in £1,800. Phrased another way, is there any requirement under the arising basis to assume such outgoing payments are comprised first of gains in the year in which they occurred. I hope my question makes sense. Thank you very much for your time and assistance, this forum is really a fantastic service offered by HMRC.
Posted Tue, 28 Feb 2023 14:48:04 GMT by HMRC Admin 32

These payments do not impact the amount as it is based on what you actually bring to the UK.

Thank you.

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