RDRM35160 - Remittance Basis: Amounts Remitted: Remittances of 'nominated' income or gains: Example 1 - Continued

Ordering rules at 2014-15

Summary

Moving forward, in 2014-2015 Alexandria has relevant foreign earnings of 拢80,000, but no other foreign income or gains. She decides not to use the remittance basis in that year.

In 2014-2015 Alexandria actually brings into the UK;

拢5,000 Jersey relevant foreign income that she did not nominate in 2013-2014 (Note 1)

拢80,000 relevant foreign earnings from 2013-2014 and

拢80,000 relevant foreign earnings from 2014-2015

Although Alexandria is not using the remittance basis in 2014-2015, the ordering rules at ITA07/s809J are still required to determine what she is to be taxed as having remitted in that year. The relevant year is 2014-2015.

Ordering rules at 2014-15

Step 1

Identify nominated income and gains remitted in the relevant year (2014-2015) 바카라 사이트� 拢nil. Relevant amount 拢85,000.

Identify the remittance basis income and gains remitted in the relevant year - 拢85,000 (refer to note 2).

Step 2

Find the total amount of the individual바카라 사이트檚 foreign income and gains (excluding those nominated) for the relevant tax year. If the remittance basis was not used for that year, (that is sections 809B, 809D or 809E did not apply), treat those amounts as nil and go to step 6.

Step 6

If the relevant amount is not nil start again at Step 2. Take the reference to 바카라 사이트榬elevant year바카라 사이트� to be a reference to foreign income and gains of the individual for the earliest 바카라 사이트榓ppropriate year바카라 사이트� previous to the last tax year from which Step 2 was undertaken.

Step 2

Find the total amount of the individual바카라 사이트檚 foreign income and gains (excluding those nominated) for the appropriate tax year (2013-2014) (refer to note 3) 바카라 사이트� para (d) foreign chargeable gains (not subject to a foreign tax) 拢65,000.

Step 3

Identify the earliest of paragraphs (a) to (h) above for which the amount determined at Step 2 is not nil 바카라 사이트� para (d) 拢65,000.

Step 4

Where the relevant amount is greater than the amount identified above, the relevant amount is reduced by the amount identified. Relevant amount reduced to - 拢85,000 less 拢65,000 = 拢20,000.

Step 5

If the relevant amount is not nil go back and repeat Step 3. Take the reference to first paragraphs (a) to (h) as a reference to the earliest paragraph not previously taken into account under Step 3.

Step 6

If the relevant amount is not nil after Steps 3 to 5 have been completed for the year, start again at Step 2. Take the reference to relevant year to be a reference to foreign income and gains of the individual for the earliest 바카라 사이트榓ppropriate year바카라 사이트� previous to the last tax year from which Step 2 was last undertaken.

Step 2

Find the total amount of the individual바카라 사이트檚 foreign income and gains (excluding those nominated) for the appropriate tax year 2012-2013 바카라 사이트� para (a) relevant foreign earnings (not subject to a foreign tax) 拢280,000.

Step 3

Identify the earliest of paragraphs (a) to (h) above for which the amount is not nil 바카라 사이트� para (a) 拢280,000.

Step 4

If the relevant amount is less than the amount identified, treat the whole of the remaining amount of the transfer as coming from that item of income or gain.

So in 2014-15 Alexandria is treated as having remitted:

  • 拢20,000 relevant foreign earnings
  • 拢65,000 foreign chargeable gains

NB - The 拢80,000 relevant foreign earnings from 2014-2015 that she brings in will be taxed on the arising basis in that year.

Note 1 - In 2013-2014 Alexandria has 拢80,000 of Jersey relevant foreign income, of which 拢75,000 were nominated; if this 拢80,000 were all in the one single account, and there was nothing else in the account then, under the principle of this section the first 拢5,000 remitted in 2014-2015 is accepted as being 바카라 사이트榥ot-nominated바카라 사이트� income.

In this example it is of little practical difference because the s809J ordering rules have already been 바카라 사이트榯riggered바카라 사이트� in 2013-2014 by her remittance of nominated income (from 2010-2011).

But if the ordering rules had not already been triggered, then because, this 拢5,000 Jersey relevant foreign income in 2014-2015 can be accepted as being 바카라 사이트榰n-nominated바카라 사이트� income first and foremost, so Alexandria바카라 사이트檚 remittance of this 拢5,000 would not, of itself, have triggered the s809J ordering rules in this year.

Note 2 - Alexandria바카라 사이트檚 remittance basis income and gains are her total foreign income or chargeable gains for all tax years up to the 바카라 사이트榬elevant tax year (2014-2015) in which she used the remittance basis under section 809B, section 809D or section 809E. It therefore excludes her relevant foreign earnings from 2014-2015 because she is not using the remittance basis in that year.

Note 3 - the 바카라 사이트榝oreign income and gains 바카라 사이트榝or바카라 사이트� the appropriate year exclude any:

  • 바카라 사이트榥ominated바카라 사이트� income or gains, or
  • income or gains that were actually remitted to the UK before the beginning of the appropriate tax year or
  • income or gains that were treated as remitted to the UK previously under section 809J before the beginning of the appropriate tax year.

In Alexandria바카라 사이트檚 case, the 拢5,000 Jersey relevant foreign income from 2013-2014, and the 拢80,000 relevant foreign earnings from 2013-2014 that she actually remitted in 2014-2015 were treated as having been remitted in 2013-2014 by the ordering rules (refer to the earlier part of example 1 RDRM35150).

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Summary

Year Accruing in year Actually brought to UK Treated as remitted
2010-2011 拢250,000 Nil Nil
2011-2012 拢300,000 拢140,000 Nil
2012-2013 Nil Nil Nil
2013-2014 拢130,000 Nil 拢130,000
2014-2015 Nil Nil Nil

Relevant foreign income: Nominated

Year Arising in year Actually brought to UK Treated as remitted
2010-2011 拢75,000 拢30,000 Nil
2011-2012 拢75,000 Nil Nil
2012-2013 拢75,000 Nil Nil
2013-2014 拢75,000 Nil Nil
2014-2015 Nil Nil Nil

Relevant foreign income: Not nominated

Year Arising in year Actually brought to UK Treated as remitted
2010-2011 Nil Nil Nil
2011-2012 拢5,000 Nil Nil
2012-2013 Nil Nil Nil
2013-2014 拢5,000 拢5,000 拢5,000
2014-2015 Nil Nil Nil

Relevant foreign earnings

Year Arising in year Actually brought to UK Treated as remitted
2010-2011 拢200,000 Nil Nil
2011-2012 拢120,000 Nil Nil
2013-2013 拢280,000 Nil 拢20,000
2013-2014 拢150,000 拢130,000 拢150,000
2014-2015 拢80,000 拢80,000 Nil