Income Tax Act 2007 section 735

Qualifying new residents and remittance-basis users: "foreign" deemed income

Section 735 determines how deemed income arising under the transfer of assets abroad rules is classified as "foreign" and sets out the tax treatment for individuals who were on the remittance basis (up to 2024-25) or who qualify as new residents (from 2025-26 onwards).

• Income deemed to arise under the transfer of assets abroad rules (section 732) may be classified as "foreign" if the underlying relevant income would be relevant foreign income were it the individual's own.
• For tax years up to and including 2024-25, where the remittance basis applied, foreign deemed income is treated as relevant foreign income of the individual and is taxable only when remitted to the UK.
• From 2025-26 onwards, individuals entitled to claim relief as qualifying new residents may include foreign deemed income in a foreign income claim under the new resident relief provisions in ITTOIA 2005.
• Any benefit or relevant income connected to foreign deemed income is treated as deriving from that income for remittance basis purposes, and a modified version of section 832 of ITTOIA 2005 applies when determining the charge on that income.