Part 14Income tax liability: miscellaneous rules
C1C2C3C4C5C6C9C10F1Chapter A1Remittance basis
Pt. 14 Ch. A1 modified by 2003 c. 1, s. 41A(8) (as inserted (with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 22)
Pt. 14 Ch. A1 modified by 2003 c. 1, s. 41A(8) (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 80 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 22)
Pt. 14 Ch. A1 modified by 1988 c. 1, s. 762ZB(3) (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 98 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 94)
Pt. 14 Ch. A1 modified by 1992 c. 12, s. 87B(3) (as inserted (21.7.2008 with effect in accordance with Sch. 7 para. 115 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 108 (with Sch. 7 paras. 116-119))
Pt. 14 Ch. A1 modified (with effect in accordance with art. 1(2)(3) Sch. 1 of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 19(3)
Pt. 14 Ch. A1 modified by 2003 c. 1, s. 41F(8) (as substituted (6.4.2015) by Finance Act 2014 (c. 26), Sch. 9 paras. 5, 47 (with Sch. 9 para. 48))
Pt. 14 Ch. A1 modified by 2005 c. 5, s. 643F(4) (as inserted (with effect for the tax year 2018-19 and subsequent years) by Finance Act 2018 (c. 3), Sch. 10 paras. 11, 21(1) (with Sch. 11 para. 22))
Pt. 14 Ch. A1 modified by 2005 c. 5, s. 643N(3)(4) (as inserted (with effect for the tax year 2018-19 and subsequent years) by Finance Act 2018 (c. 3), Sch. 10 paras. 11, 21(1) (with Sch. 11 para. 22))
F8Exempt property relief
S. 809X crossheading inserted (17.7.2012) (with effect in accordance with Sch. 12 para. 17 of the amending Act) by Finance Act 2012 (c. 14), Sch. 12 para. 9
C8C7C9C10809XC9C10Exempt property
1
Exempt property which is brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies is to be treated as not remitted to the United Kingdom.
2
Subsections (3) to (5) set out the cases in which property is exempt property.
3
Property is exempt property if it meets the public access rule (see F15 section 809Z).
4
Clothing, footwear, jewellery and watches F2... are exempt property if they meet the personal use rule (see section 809Z2).
5
Property F3... is exempt property if—
a
the property meets the repair rule (see section 809Z3),
b
the property meets the temporary importation rule (see section 809Z4), or
c
the notional remitted amount (see section 809Z5) is less than £1,000.
C8C7C9C10809YC9C10Property that ceases to be exempt property treated as remitted
1
Property that ceases to be exempt property is to be treated as having been remitted to the United Kingdom at the time it ceases to be exempt property.
2
Property ceases to be exempt property in F18any of the following cases.
3
The first case is where the whole or part of the exempt property is sold, or otherwise converted into money, whilst it is in the United Kingdom.
4
The second case is where the property—
a
is exempt property only because it meets one or more of the relevant rules,
b
ceases to meet that rule, or all of those rules, whilst it is in the United Kingdom, and
c
does not meet any other relevant rule.
F164A
Where exempt property has been lost, stolen or destroyed, the first and second cases do not apply in relation to the property during any period—
a
beginning with the time at which it was lost, stolen or destroyed, and
b
(if lost or stolen) ending with the time at which it is recovered.
4B
The third case is where a compensation payment is released in respect of exempt property that has been lost, stolen or destroyed.
5
In this section—
“money” includes—
- a
a traveller's cheque,
- b
a promissory note,
- c
a bill of exchange, and
- d
any other—
- i
instrument that is evidence of a debt, or
- ii
voucher, stamp or similar token or document which is capable of being exchanged for money, goods or services, and
- i
- a
“relevant rule” means—
- a
the public access rule,
- b
the personal use rule,
- c
the repair rule, and
- d
the temporary importation rule.
- a
F96
Subsection (1) does not apply to property that ceases to be exempt property F17by virtue of the first or second case if—
a
the property, or anything into which it is converted, is used by a relevant person to make a qualifying investment within the period of 45 days beginning with the day on which it ceased to be exempt property, and
b
the remittance basis user makes a claim for relief under this subsection on or before the first anniversary of the 31 January following the tax year in which the property ceases to be exempt property.
7
The reference in subsection (6)(a) to anything into which property is converted is—
a
if the property is disposed of, the disposal proceeds, and
b
if the property is converted into money in some other way, the money into which it is converted,
(including where the disposal or conversion occurs after the property ceases to be exempt property).
8
If subsection (1) does not apply by virtue of subsection (6)—
a
the property (or thing into which it was converted) used to make the investment is to be treated as containing or deriving from an amount of each kind of income and gain mentioned in section 809Q(4)(a) to (h) equal to the fixed amount,
b
the income or gains treated under section 809X as not remitted to the United Kingdom continue to be treated as not remitted to the United Kingdom even though the property has ceased to be exempt property, and
c
the business investment provisions apply to the income and gains as they apply to income or gains treated under section 809VA(2) as not remitted to the United Kingdom.
9
“The fixed amount” is the amount of that kind of income or gain contained in the property when it was brought to, or received or used in, the United Kingdom (as mentioned in section 809X).
10
If the investment is made using more than just the property (or thing into which it was converted), treat only the part made using the property (or thing into which it was converted) as “the investment” for the purposes of the business investment provisions.
C8C7C9C10809YAC9C10F6Exception to section 809Y: proceeds taken offshore or invested
1
Section 809Y(1) does not apply to property if—
a
it ceases to be exempt property because the whole of it is sold whilst it is in the United Kingdom, and
b
conditions A to F are met.
2
Condition A is that the sale is to a person other than a relevant person.
3
Condition B is that the sale is by way of a bargain made at arm's length.
4
Condition C is that, once the sale is completed, no relevant person—
a
has any interest in the property,
b
is able or entitled to benefit from the property by virtue of any interest, right or arrangement, or
c
has any right (whether conditional or unconditional) to acquire any interest mentioned in paragraph (a) or ability or entitlement mentioned in paragraph (b).
5
Condition D is that the whole of the disposal proceeds are released (whether in one go or in instalments) on or before the final deadline.
6
“The final deadline” is the first anniversary of the 5 January following the tax year in which the property ceases to be exempt property (within the meaning of section 809Y).
7
Condition E is that—
a
the whole of the disposal proceeds are taken offshore or used by a relevant person to make a qualifying investment within the period of 45 days beginning with the day on which the proceeds are released, or
b
if the disposal proceeds are paid in instalments, each instalment is taken offshore or used by a relevant person to make a qualifying investment within the period of 45 days beginning with the day on which the instalment is released.
8
But if any of the disposal proceeds are released in the period of 45 days ending with the final deadline, Condition E is satisfied, as respects those proceeds, only if they are taken offshore or used by a relevant person to make a qualifying investment on or before the final deadline.
9
Condition F is that, if Condition E is satisfied wholly or in part by using disposal proceeds to make a qualifying investment, the remittance basis user makes a claim for relief under section 809YC(2) on or before the first anniversary of the 31 January following the tax year in which the property is sold.
10
For the purposes of this section, proceeds or instalments are “released” on the day on which they first become available for use by or for the benefit of any relevant person.
11
This section does not apply if the sale is made as part of or as a result of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.
C8C7C9C10809YBC9C10Condition E: supplementary
1
An officer of Revenue and Customs may agree in a particular case to extend any period within which disposal proceeds (or instalments) must be taken offshore or used by a relevant person to make a qualifying investment in order to satisfy Condition E.
2
The power to agree to an extension is exercisable only in exceptional circumstances and only if the remittance basis user requests such an extension.
C8C7C9C10809YCC9C10Effect of disapplying section 809Y
1
This section has effect if section 809Y(1) does not apply to property by virtue of section 809YA.
2
The income and gains treated under section 809X as not remitted to the United Kingdom continue to be treated after the sale as not remitted to the United Kingdom even though the property has ceased to be exempt property.
3
But nothing in subsection (2) prevents anything done in relation to any part of the disposal proceeds after that part is taken offshore (or used to make a qualifying investment) from counting as a remittance of the underlying income or gains to the United Kingdom at the time when the thing is done.
4
Treat the disposal proceeds as containing or deriving from an amount of each kind of income and gain mentioned in section 809Q(4)(a) to (h) equal to the amount of that kind of income or gain contained in the exempt property when it was brought to, or received or used in, the United Kingdom (as mentioned in section 809X).
5
Where Condition E was met by using the disposal proceeds to make a qualifying investment—
a
the business investment provisions apply to the income and gains that continue, by virtue of subsection (2), to be treated as not remitted as they apply to income or gains that are treated under section 809VA(2) as not remitted, and
b
if the investment was made using more than just the disposal proceeds, treat only the part of the investment made using the disposal proceeds as “the investment” for the purposes of those provisions.
C8C7C9C10809YDC9C10Chargeable gains accruing on sales of exempt property
1
This section applies to an individual (“P”) if—
a
a chargeable gain (but not a loss) accrues to a person on a sale of exempt property,
b
but for section 809YA, section 809Y(1) would have applied to the property by virtue of the sale, and
c
P is either—
i
the person to whom the gain accrues, or
ii
a person to whom a part of the gain is treated as accruing under section 13 of TCGA 1992 (members of non-resident companies).
2
The relevant UK gain is to be treated for the purposes of this Chapter as if—
a
it were a foreign chargeable gain of P, and
b
in the case of section 809E, it were not part of P's UK income and gains.
3
Accordingly, if section 809F applies to P for the applicable tax year F19..., the relevant UK gain is charged in accordance with section 12 of TCGA 1992 as if it were a foreign chargeable gain.
4
The relevant UK gain is—
a
in a case falling within subsection (1)(c)(i), the gain accruing to P,
b
in a case falling within subsection (1)(c)(ii), the part of the gain treated as accruing to P.
5
The applicable tax year is —
a
if section 10A of TCGA 1992 (temporary non-residents) applies in P's case and the relevant UK gain is within subsection (2) of that section, the year of return as defined in that section,
b
otherwise, the tax year in which the relevant UK gain accrues.
6
In applying this Chapter to the relevant UK gain—
a
treat the amount of any gains mentioned in section 809Q(4)(e) contained in the disposal proceeds by virtue of section 809YC(4) as increased by the amount of the relevant UK gain,
b
disregard section 809U, and
c
anything done in relation to any part of the disposal proceeds before the part is taken offshore or used to make a qualifying investment (or both) does not count as a remittance to the United Kingdom of any of the relevant UK gain.
7
The relevant UK gain is to be treated for the purposes of the following provisions of TCGA 1992 as if it fell within the definition of foreign chargeable gains in section 12(4) of that Act—
a
section 10A,
b
section 12,
c
section 14A, and
d
sections 16ZB to 16ZD.
8
This section has effect despite section 14A(2) of TCGA 1992.
9
This section does not apply with respect to a chargeable gain if P gives notice to Her Majesty's Revenue and Customs under this subsection.
10
A notice under subsection (9)—
a
must be in writing and must identify the gain in question,
b
must be given on or before the first anniversary of the 31 January following the applicable tax year, and
c
may not be revoked after that first anniversary.
C8C7C9C10809YEC9C10F7Exception to section 809Y: gifts to the nation
1
Section 809Y(1) does not apply to property if—
a
it ceases to be exempt property in the second case mentioned in that section, and
b
by no later than the time when it ceases to be exempt property, it has been donated in the circumstances described in paragraph 1 of Schedule 14 to FA 2012 (gifts to the nation).
2
Where section 809Y(1) does not apply to property by virtue of this section, the property is to continue to be treated as not remitted to the United Kingdom even though it no longer meets any of the relevant rules.
C8C7C9C10809YFC9C10F14Exception to section 809Y: compensation taken offshore or invested
1
Section 809Y(1) does not apply to property if—
a
it ceases to be exempt property because a compensation payment in respect of it is released, and
b
conditions A and B are met.
2
Condition A is that the whole of the compensation payment is taken offshore or used by a relevant person to make a qualifying investment within the period of 45 days beginning with the day on which the payment is released.
3
Condition B is that, if Condition A is satisfied wholly or in part by using the compensation payment to make a qualifying investment, the remittance basis user makes a claim for relief under subsection (4) on or before the first anniversary of the 31 January following the tax year in which the payment is released.
4
If section 809Y(1) does not apply to property by virtue of subsection (1), the income and gains treated under section 809X as not remitted to the United Kingdom continue to be treated after the compensation payment is released as not remitted to the United Kingdom even though the property has ceased to be exempt property.
5
But nothing in subsection (4) prevents anything done in relation to any part of the compensation payment after that payment is taken offshore (or used to make a qualifying investment) from counting as a remittance of the underlying income or gains to the United Kingdom at the time when the thing is done.
6
Treat the compensation payment as containing or deriving from an amount of each kind of income and gain mentioned in section 809Q(4)(a) to (h) equal to the amount of that kind of income or gain contained in the exempt property when it was brought to, or received or used in, the United Kingdom (as mentioned in section 809X).
7
Where Condition A was met by using the compensation payment to make a qualifying investment—
a
the business investment provisions apply to the income and gains that continue, by virtue of subsection (4), to be treated as not remitted as they apply to income or gains that are treated under section 809VA(2) as not remitted, and
b
if the investment was made using more than just the compensation payment, treat only the part of the investment made using the payment as “the investment” for the purposes of those provisions.
C8C7C9C10809ZC9C10Public access rule: general
1
Property meets the public access rule if conditions F21B and C are met.
F222
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3
Condition B is that—
a
the property is available for public access at an approved establishment,
b
the property is to be available for public access at an approved establishment and, in connection with its being so available, is in transit to, or in storage at, public access rule premises, or
c
the property has been available for public access at an approved establishment and, in connection with its having been so available, is in transit from, or in storage at, public access rule premises.
4
Property is “available for public access” at an approved establishment if the property is—
a
on public display at the establishment,
b
held by the establishment and made available to the public on request for viewing or for educational use, or
c
held by the establishment for public exhibition in connection with the sale of the property.
5
An “approved establishment” is—
a
an approved museum, gallery or other institution within the meaning of Group 9 of Schedule 2 to the Value Added Tax (Imported Goods) Relief Order 1984, or
b
any other person, premises or institution designated (or of a description designated) by the Commissioners.
6
“Public access rule premises” are—
a
premises in the United Kingdom at which the property is to be, or has been, available for public access, or
b
other commercial premises in the United Kingdom used by the approved establishment for the storage of property in advance of its being, or after its having been, available for public access at the approved establishment.
7
Condition C is that, during the relevant period, the property meets condition B for no more than—
a
two years, or
b
such longer period as the Commissioners may specify.
8
“The relevant period” means the period—
a
beginning with the importation of the property, and
b
ending when it ceases to be in the United Kingdom after that importation.
F208A
But if the property is lost or stolen—
a
the relevant period ends with the time at which it is lost or stolen, and
b
a new relevant period begins with its importation or the time at which it is recovered.
9
“Importation” means the property being brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies.
F2310
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F24C8C7C9C10809Z1C9C10Public access rule: relevant VAT relief
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C8C7C9C10809Z2C9C10Personal use rule
1
Clothing, footwear, jewellery or watches meet the personal use rule if they—
a
are property of a relevant person, and
b
are for the personal use of a relevant individual.
2
In this section—
F10a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
“relevant individual” means an individual who is a relevant person by virtue of section 809M(2)(a), (b), (c) or (d) (the individual with income or gains, or a husband, wife, civil partner, child or grandchild).
C8C7C9C10809Z3C9C10Repair rule
1
Property meets the repair rule for the whole of the relevant period if, during the whole of that period, the property meets the repair conditions.
2
Property meets the repair rule for a part of the relevant period if—
a
during the whole of that part of that period, the property meets the repair conditions, and
b
during the whole of the other part of that period, or the whole of each other part of that period, the property meets the repair conditions or the public access rule.
3
Property meets the repair conditions if the property—
a
is under repair or restoration,
b
is in transit from a place outside the United Kingdom to repair rule premises, in transit between such premises, or in storage at such premises, in advance of repair or restoration, or
c
is in storage at such premises, in transit between such premises, or in transit from such premises to a place outside the United Kingdom, following repair or restoration.
4
“Repair rule premises” means—
a
premises in the United Kingdom that are to be used, or have been used, for the repair or restoration referred to in subsection (3)(b) or (c), or
b
other commercial premises in the United Kingdom used by the restorer for the storage of property in advance of, or following, repair or restoration of property by the restorer.
5
“Restorer” means the person who is to carry out, or has carried out, the repair or restoration referred to in subsection (3)(b) or (c).
6
Property meets the repair conditions, or the public access rule, during the whole of a period, or the whole of part of a period, if the property meets those conditions or that rule—
a
on the whole of, or on part of, the first day of that period or part period,
b
on the whole of, or on part of, the last day of that period or part period, and
c
on the whole of each other day of that period or part period.
7
“The relevant period” has the same meaning as in section 809Z.
C8C7C9C10809Z4C9C10Temporary importation rule
1
Property meets the temporary importation rule if the total number of countable days F29(subject to any increase under subsection (3B)) is 275 or fewer.
2
A “countable day” is a day on which, or on part of which, the property is in the United Kingdom by virtue of being brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies (whether the current case, or a past case, when the property was so brought, received or used).
3
A day is not a countable day if, on that day or any part of that day—
F26za
the property meets the public access rule,
a
the property meets the personal use rule,
b
the property meets the repair rule, F11...
F27ba
subsection (3A) applies to the property,
c
the notional remitted amount in relation to the property is less than £1,000 F12 or
F253A
This subsection applies to the property if—
a
it is not available to be used or enjoyed in the United Kingdom by or for the benefit of a relevant person because it has been lost, stolen or destroyed,
b
(if lost or stolen) it has not been recovered, and
c
no compensation payment has been released in respect of it.
3B
If—
a
property that has been lost or stolen is recovered,
b
the first day after the day on which it is recovered is a countable day, and
c
excluding that countable day there have already been 231 or more countable days in relation to the property,
the number of countable days specified in subsection (1) is read as being increased by the number necessary for there to be 45 countable days beginning with the countable day mentioned in paragraph (b).
F304
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F305
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F306
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F307
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F308
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F309
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3010
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C8C7C9C10809Z5C9C10Notional remitted amount
1
The “notional remitted amount”, in relation to property, is the amount F4... that would be taken to be remitted to the United Kingdom in relation to the property (if section 809X did not apply in relation to the property).
F52
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F53
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C8C7C9C10809Z6C9C10Exempt property: other interpretation
1
This section applies for the purposes of sections 809X to 809Z5.
2
“Property” does not include money.
3
In subsection (2) “money” includes—
a
a traveller's cheque,
b
a promissory note,
c
a bill of exchange, and
d
any other—
i
instrument that is evidence of a debt, or
ii
voucher, stamp or similar token or document which is capable of being exchanged for money, goods or services.
4
References to property being in the United Kingdom are references to the property—
a
being in the United Kingdom after being brought to, or received in, the United Kingdom in circumstances in which section 809L(2)(a) applies, or
b
being used in the United Kingdom in circumstances in which section 809L(2)(a) applies.
F315
References to property being lost, stolen or destroyed are to the property being lost, stolen or destroyed whilst in the United Kingdom.
6
“Compensation payment”, in relation to property that has been lost, stolen or destroyed, means any payment of compensation (whether under an insurance policy or otherwise) in respect of the property.
7
A compensation payment is “released” on the day on which it first becomes available for use in the United Kingdom by or for the benefit of any relevant person.
8
Property that has been lost or stolen is “recovered” on the day on which it becomes available to be used or enjoyed in the United Kingdom by or for the benefit of a relevant person.
Pt. 14 Ch. A1 inserted (21.7.2008 with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 1 (with Sch. 7 paras. 85-89)