RDRM35070 - Remittance Basis: Amounts remitted: Quantification: Condition C - remittances of relevant income or chargeable gains - relevant debt
Where the qualifying property of a gift recipient is used outside the UK (directly or indirectly) in respect of a relevant debt, the amount remitted is equivalent to the amount of the relevant foreign income or chargeable gains of which the qualifying property consists, or from which the qualifying property derives (section 809P(7) and (11) ITA 2007).
Refer to RDRM33260 for details about Condition C and qualifying property.
Qualifying property may be used outside the UK to redeem or service a debt only part of which is a 바카라 사이트˜relevant debt바카라 사이트™ within the meaning of (section 809L(7) ITA 2007) . In such cases, the amount that is taxable as an 바카라 사이트˜amount remitted바카라 사이트™ is, if it would otherwise be greater, limited to the amount that is attributable to that part of the debt which is a relevant debt (section 809P(10)).
Also see RDRM35010 for guidance on when the same foreign income or gains have been remitted more than once.
Example 1
In May 2015 Klimt, a remittance basis user, transfers £100,000 cash that is part of his of his relevant foreign income for that year to his sister Helena, a gift recipient .The £100,000 is the 바카라 사이트˜qualifying property바카라 사이트™.
In October 2016 Helena takes out a loan with an offshore bank for £25,000, and buys a car in the UK which she makes available to Klimt and his wife to use.
Helena uses some of the £100,000 to repay the loan.
There is a remittance because the qualifying property (the £100,000) of a gift recipient (Helena) is used outside of the UK in respect of a relevant debt (the offshore loan). The loan is a relevant debt because property is used in the UK in by a relevant person (Klimt and his wife). The amount remitted is £25,000.
Example 2
Fraser, who is a remittance basis user, purchases some non-UK shares and bonds for £80,000 in January 2012 using his foreign income and gains.
Fraser makes a gift of these shares and bonds to his brother, Victor. In March 2012 Victor takes out a loan of £40,000 with an offshore bank to purchase a designer table and chairs which he imports to the town house which is used by his brother Fraser. Victor then uses £40,000 of the shares to pay off the loan.
Fraser has made a gift (the shares) that derives from his foreign income and chargeable gains (the £80,000) to Victor who is then a 바카라 사이트˜gift recipient바카라 사이트™. The shares are 바카라 사이트˜qualifying property of a gift recipient바카라 사이트™. The loan taken out to purchase the furniture is a 바카라 사이트˜relevant debt바카라 사이트™ as it is property brought to the UK for the benefit of a relevant person (Fraser).
The qualifying property (the shares) is used outside the UK in respect of this relevant debt. The amount of the remittance is equal to the relevant income or gains from which the qualifying property derives, that is, £40,000 (section 809P(11)(b)). Also refer to RDRM35200 Mixed Funds.