Gavin Stebbing

I don’t think the answer from HMRC Admin 2 Response really answers the question – it refers to the source of income rather than the location of assets. I also think the answer as stated is incorrect; it is the source of the income that determines whether income is UK income or foreign income. The currency it is paid in is irrelevant – of course most foreign income will be paid in foreign currencies rather than sterling, but that does not necessarily mean all income paid in foreign currencies is foreign income. A UK resident company can pay dividends in $US and it will still be UK source income. Similarly there are many situations where income is paid in GBP by foreign funds or companies (eg Jersey and Guernsey resident entities) where the income would be regarded as having a foreign source. The question is about the location of funds, presumably where someone has claimed the remittance basis of taxation on such funds and needs to avoid bringing it to the UK. Any funds brought to the UK will be regarded as a remittance for UK tax purposes. If Interactive Brokers UK only acts as an arranger, and all cash and securities are actually held overseas by the US LLC, then there would be no remittance. The key thing is to confirm with the broker that at no time are the funds or assets held in the UK. Note that the purchase of a UK share or security will be regarded as a remittance, even if it is purchased overseas and the asset is held overseas. By way of footnote, there is a specific exemption for bank transfers between foreign centres that pass through the UK banking system which is covered in HMRC manuals at RDRM 33560, but that is unlikely to be relevant here. Thanks Gavin

My client has an Inherited IRA from her mother's estate. The client is UK resident. Can you confirm that my client is only liable to UK tax on distributions received from the IRA i.e. she is not liable to UK tax on income arising to the IRA until such time as she receives a distribution. The distribution should be declared as foreign interest on the tax return. If tax has been deducted from the distribution, this is not available for credit against UK tax - rather she should seek a refund of that tax on form 1040NR.