SolvedRDRM35150 | Remittance Basis: Amounts Remitted: Remittances of 'nominated' income or gains: Remittances of nominated income or gains - example 1
From HM Revenue & Customs · Remittance Basis and Domicile Manual
Alexandria has foreign income or gains, and uses the remittance basis
as follows:
| Year | Foreign chargeable gains (Para (d)) | Relevant foreign income - Jersey (Para (c)) | Relevant foreign earnings (Para (a)) | Nomination |
| (from Jersey RFI) | |||||
|---|---|---|---|---|---|
| 2010-11 | £250,000 | £75,000 | £200,000 | £75,000 RFI | |
| 2011-12 | £300,000 | £80,000 | £120,000 | £75,000 RFI | |
| 2012-13 | Nil | £75,000 | £280,000 | £75,000 RFI | |
| 2013-14 | £130,000 | £80,000 | £150,000 | £75,000 RFI | |
| Totals | £680,000 | £310,000 | £750,000 | - |
In 2013-2014 Alexandria actually and identifiably remits:
£30,000 Jersey relevant foreign income she nominated in 2010-2011
£140,000 foreign chargeable gains from 2011-2012, and
£50,000 relevant foreign earnings from 2013-2014
The ordering rules are triggered. The ‘relevant year’ is 2013-14
Step 1
Identify nominated income and gains remitted in the relevant year - £30,000. Relevant amount £220,000.
Identify the remittance basis income and gains remitted in the relevant year - £190,000
Step 2
Find the total amount of the individual’s foreign income and gains (excluding those nominated) for the relevant tax year:
Para (a) relevant foreign earnings (not subject to a foreign tax) £150,000
Para (c) relevant foreign income (not subject to a foreign tax) £5,000
Para (d) foreign chargeable gains (not subject to a foreign tax) £130,000
Step 3
Identify the earliest of paragraphs (a) to (h) above for which the amount determined in step 2 is not nil – para (a) £150,000
Step 4
Where the relevant amount is greater than the amount identified above, the relevant amount is reduced by the amount identified - £220,000 less £150,000 = £70,000
Step 5
If the relevant amount is not nil go back and repeat step 3. Take the reference to the first of paragraphs (a) to (h) as a reference to the earliest paragraph not previously taken into account under step 3.
Step 3
Repeated – para (c) £5,000
Step 4
Repeated – relevant amount reduced to £65,000
Step 5
In the order of preference listed above repeat steps 3 and 4
Step 3
Repeated – para (d) £130,000
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.
Alexandria will be taxed on £220,000 of remittances as if she had actually remitted the following
Foreign chargeable gains
| Year | Accruing in year | Actually remitted to UK | Treated as remitted |
|---|---|---|---|
| 2010-2011 | £250,000 | Nil | Nil |
| 2011-2012 | £300,000 | £140,000 | Nil |
| 2012-2013 | Nil | Nil | Nil |
| 2013-2014 | £130,000 | Nil | £65,000 |
Relevant foreign income: Nominated
| Year | Arising in year | Actually remitted to UK | Treated as remitted |
|---|---|---|---|
| 2010-2011 | £75,000 | £30,000 | Nil |
| 2011-2012 | £75,000 | Nil | Nil |
| 2012-2013 | £75,000 | Nil | Nil |
| 2013-2014 | £75,000 | Nil | Nil |
Relevant foreign income: Not nominated
| Year | Arising in year | Actually remitted to UK | Treated as remitted |
|---|---|---|---|
| 2010-2011 | Nil | Nil | Nil |
| 2011-2012 | £5,000 | Nil | Nil |
| 2012-2013 | Nil | Nil | Nil |
| 2013-2014 | £5,000 | Nil | £5,000 |
Relevant foreign earnings
| Year | Arising in year | Actually remitted to UK | Treated as remitted |
|---|---|---|---|
| 2010-2011 | £200,000 | Nil | Nil |
| 2011-2012 | £120,000 | Nil | Nil |
| 2012-2013 | £280,000 | Nil | Nil |
| 2013-2014 | £150,000 | £50,000 | £150,000 |
If in future years she actually remits any of these monies, the ordering rules will treat her as having remitted something else instead (refer to RDRM35160 - Example 1 continuation).