RDRM35220 - Remittance Basis: Amounts Remitted: Mixed Funds: Remittances from mixed funds - definition of 'mixed fund'
A mixed fund is an overseas fund of money,听other property, or both, which contains or consists of more than one type of income, gains or capital, or income,听gains听or capital from more than one tax year.听
Although the rules refer to a 바카라 사이트榝und바카라 사이트� the legislation is not limited to something as simple as a bank account. A mixed fund might be an asset, for example a painting or other such property that derives from foreign income or gains (refer to RDRM33150 Condition B - remittances derived from income or gains). This is regarded as containing the foreign income and gains that were used to purchase the property, and so is taxable in the same way as that foreign income or gains (section 809R(2) ITA 2007).听
Section 809Q(6) Income Tax Act 2007听
For the purposes of determining whether there has been a remittance from a mixed fund,听where听Condition A within section 809L ITA 2007 applies,听the definition of a mixed fund is听money or other property which, immediately before the transfer (as referred to in section 809Q(1)), contains or derives from either:听
more than one of the kinds of income and capital mentioned in听section听809Q(4),听
income or capital for more than one tax year听
TRF capital (see RDRM75100) and another kind of income or capital听
The kinds of income and capital mentioned in section 809Q(4), which includes gains, are set out at RDRM35240 under 바카라 사이트楽tep 1바카라 사이트�.听
The words 바카라 사이트榠mmediately before the transfer바카라 사이트� are important.听Once all of the foreign income and gains in the fund have been identified (using the Steps in section 809Q(3) 바카라 사이트� see RDRM35240) as remitted by a relevant person, unless additional amounts of income and gains are credited to the mixed fund, the next transfer of funds will be capital.听Transfers out of a mixed fund, whether these are remittances or offshore transfers, are on a transaction-by-transaction basis, unless the temporary annualised basis applies between 6 April 2025 and听5 April 2028 under the temporary repatriation facility (TRF) (see RDRM75500), or the special mixed fund rules applied before 6 April 2025 (see RDRM35810).听
This means that mixed funds include:听
an asset (property) that is, or is acquired with or otherwise derives from the foreign income or gains听
assets acquired using mixed funds - for example, houses, cars, works of art and shares in companies听
an overseas account that was set-up using funds from money or property that is or was a mixed fund听
an overseas account that includes more than one of the听kinds of income or capital mentioned at section 809Q(4)听
A mixed fund does not exist just because the individual has several accounts with the same banking institution, if each account is separately constituted and contains only one of the relevant types of income or capital from only one year. This will usually include bank accounts set up as sub-accounts under an 바카라 사이트榰mbrella바카라 사이트� agreement.听
Where an individual has used foreign income or gains as collateral for a loan, which is a relevant debt, and the income or gains 바카라 사이트榰sed바카라 사이트� are contained within more than one account or asset, see RDRM35270.听听
If income and capital sources from a tax year are maintained separately (sometimes referred to as 바카라 사이트榢ept clean바카라 사이트� or 바카라 사이트榗lean capital바카라 사이트�) no mixed fund is created, and so these rules will not apply.听
For example, an individual maintains 3听separate accounts with the same offshore institution:听
account A into which they pay their relevant foreign earnings for the tax year听
account B into which they pay some inherited money (clean capital)听
account C into which they pay some relevant foreign income for the tax year听
As long as these accounts do not become mixed funds, the individual can bring money into the UK from Account B and that will be accepted as a being a transfer of 바카라 사이트榗lean바카라 사이트� capital, and so will not be a taxable remittance.听