Access to the remittance basis is not free for a UK non-dom who is at least 18 years old, and classed as a “long-term resident”. Such a person must pay the “remittance basis charge” (RBC) for any tax year in which she wishes to use the remittance basis.

Who is a “long-term resident?”

The term is not contained within the statute; HMRC simply employs it as a useful shorthand.

It applies to the following groups of non-doms:

  • Those who have been UK-resident for seven out of the previous nine tax years; and
  • Those who have been UK-resident for 12 out of the previous 14 tax years.

For those in the first group, the RBC is GBP 30,000.

For those in the second group, the RBC is GBP 60,000.

How does the charge work?

The individual nominates a part of his foreign income or gains, being an amount that would give rise to tax equivalent to the RBC.

If the taxpayer does not have enough foreign income or gains for this purpose, the legislation deems an additional amount (of notional income) to have been nominated, so as to result in a tax charge up to the amount of the RBC.

Deemed-domiciled taxpayers excluded

The individual must obviously be UK-resident and UK-non-domiciled in the tax year of claim. However, if he is non-UK domiciled under general law, but deemed-UK domiciled for tax purposes, he cannot access the remittance basis.

The RBC and dually resident taxpayers

The RBC rules impact dually resident taxpayers in the following ways:

  • The RBC still applies even where a treaty tie-breaker clause deems the taxpayer to be resident in the other jurisdiction; and
  • For the purposes of determining whether the individual is a long-term resident, one must count any tax years in which the individual is deemed, under UK domestic law, to be a resident of the UK. This applies irrespective of whether a treaty tie-breaker rule deems the individual to be resident in the other country.

The nature of the RBC

One effect of the nomination mechanism (explained above) is that the RBC is treated as though it were a tax. This ensures that, where relevant, it may be creditable or deductible in the other country. However, where the taxpayer has not nominated sufficient income or gains, and a deeming effect creates notional income (see above), the portion of the RBC relating to that notional income is not available for credit or deduction.

Background to the RBC

The RBC was introduced in 2008. Before that time, the remittance basis applied automatically, and for free, to UK resident and non-domiciled individuals. (It also applied to individuals who were UK-resident, but not “ordinarily resident” in the UK. The concept of “ordinary residence” was done away with in 2013/14.)

When introduced in 2008, the RBC was a single charge, of GBP 30,000, applying to non-doms who had been resident for seven out of the nine tax years immediately preceding the year in question. This remained the position until 2011/12.

The following tax year, a higher RBC was introduced for non-doms who had been resident for 12 out of the 14 tax years preceding the relevant tax year. The higher RBC was first set at GBP 50,000. That subsisted from 2012/13 to 2014/15. From 2015/16 onwards, the higher RBC is GBP 60,000.

There was an even higher RBC, a charge of GBP 90,000 for non-doms who had been UK-resident for at least 17 out of the previous 20 tax years. That charge applied in 2015/16 and 2016/17. However, following the Finance Act 2017 reforms (which deemed such taxpayers to be UK-domiciled), this provision was withdrawn.


(Photo by Two Paddles Axe and Leatherwork on Unsplash)