Income Tax Act 2007 section 809UA

Money used for payments on account

Section 809UA provides relief from the remittance basis rules where a non-domiciled individual uses offshore income or gains to make payments on account of income tax directly to HMRC, in circumstances where they were subject to the remittance basis charge in the previous year but are not in the current year.

• Where an individual makes payments on account directly to HMRC using foreign income or gains, those amounts are not treated as remitted to the UK, provided an equivalent amount is taken back offshore by 15 March following the end of the relevant tax year (or a later date agreed by HMRC)
• The relief applies where the individual was subject to the annual remittance basis charge under section 809H in the previous tax year ("tax year 1") but is not subject to it in the current tax year ("tax year 2") for which the payments on account are made
• The amount that can benefit from this treatment — the "relevant amount" — is capped at the lower of the money brought to the UK to make the payments on account and the annual remittance basis charge that applied in tax year 1
• If the individual needs extra time beyond 15 March to move the money offshore, they can claim an extension up to 5 April following tax year 2, but only if they have filed their self-assessment return for tax year 2 and reasonably expect a tax repayment from HMRC