Legalize / United Kingdom / Public General Act

Income Tax Act 2007

Type Public General Act

Publication 2007-03-20

Last updated 2026-01-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(4A) Section 257KB applies in determining for those purposes when an investment within subsection (3)(ba) is made as it applies for the purposes of Part 5B (tax relief on social investments).

(5) Subsection (6) applies if, by virtue of the provision of a compliance statement under section 205 , 257ED or 257PB above ..., the requirement of this section is not met.

(6) The requirement is to be treated as having been met throughout the period—

(a) beginning with the time the relevant holding was issued, and

(b) ending with the time the compliance statement was provided.

(6A) If the relevant company began to carry on a trade less than three years before the date the relevant holding is issued, section 331A as it applies for the purposes of this section has effect with the substitution of the following subsections for subsections (3) to (5A)—

(3) The first operating costs condition is that in at least one of the relevant three succeeding years at least 15% of the relevant operating costs constitute expenditure on research and development or innovation. (4) The second operating costs condition is that in each of the relevant three succeeding years at least 10% of the relevant operating costs constitute such expenditure. (5) In subsections (3) and (4)— - “relevant operating costs” means— 1. if the relevant company is a single company at the applicable time, the operating costs of that company, and 2. if the relevant company is a parent company at the applicable time, the sum of— 1. the operating costs of the relevant company, and 2. the operating costs of each company which is a qualifying subsidiary of the relevant company at that time, excluding a company's operating costs for any of the relevant three succeeding years during any part of which the company is not a qualifying subsidiary of the relevant company; - “the relevant three succeeding years” means the three consecutive years the first of which begins with the date the relevant holding is issued.

(7) Section 280B(8) and (9) (meaning of “trade” etc) applies for the purposes of this section as it applies for the purposes of section 280B.

Transfers between spouses or civil partners

Overview of Chapter

Cases where maximum SEIS relief not obtained

Receipts of value by and from connected persons etc

Restrictions on being an employee, partner or paid director

Maximum amount for cases outside section 257MNA

No previous other risk capital scheme investments

Cases where maximum SEIS relief not obtained

The property managing subsidiaries requirement

Cases where maximum SEIS relief not obtained

Limit on investment in shorter applicable period

Cases where maximum SEIS relief not obtained

Limit on investment in shorter applicable period

Loss of relief if shares disposed of within 5 years

Power to amend limits on amounts that may be invested

No entitlement to relief which would have been lost if it had already been obtained

Receipt of replacement value

The investment limits condition

The permitted maximum age condition

Power to make regulations as to procedure

Conversion of convertible shares and securities

The financial health requirement

The 70% qualifying holdings condition: disposal of holding

The UK permanent establishment requirement

Qualifying holdings: introduction

The risk-to-capital requirement

The no guaranteed loan requirement

Maximum risk finance investments when relevant holding is issued requirement

Maximum risk finance investments during the 5-year post-investment period requirement

The spending of money raised by SEIS investment requirement

How relief works

Limit on reliefs in any tax year not to exceed cap for tax year

Receipt of replacement value

Call options

Value received where part of issue treated as made in previous tax year

Receipt of replacement value

Meaning of “qualifying trade”

Value received: receipts of insignificant value

Value received where part of issue treated as made in previous tax year

Receipts of value by and from connected persons etc

Acquisition value of qualifying investments

Qualifying holdings: introduction

The permitted maximum age condition

Maximum risk finance investments during the 5-year post-investment period requirement

The use of the money raised requirement

Maximum risk finance investments during the 5-year post-investment period requirement

The minimum investment on further issue condition

The control and independence requirement

Meaning of “qualifying trade”

The no business acquisition condition

Loan to invest in co-operative

Maximum risk finance investments when relevant holding is issued requirement

Maximum risk finance investments during the 5-year post-investment period requirement

196A

In section 192(1)(ia) “shipbuilding” has the same meaning as in the Framework on state aid to shipbuilding (2003/C 317/06), published in the Official Journal on 30 December 2003 , except that references in that Framework to building in the Union are to be read as including building in the United Kingdom.

196B

(1) This section supplements section 192(1)(ib).

(2) “Coal” has the meaning given by Article 2 of Council Regulation (EC) No. 1407/2002 (state aid to coal industry).

(3) The production of coal includes the extraction of it.

196C

In section 192(1)(ic) “steel” means any of the steel products listed in Annex 1 to the Guidelines on national regional aid (2006/C 54/08), published in the Official Journal on 4 March 2006.

307A

In section 303(1)(ia) “shipbuilding” has the same meaning as in the Framework on state aid to shipbuilding (2003/C 317/06), published in the Official Journal on 30 December 2003 , except that references in that Framework to building in the Union are to be read as including building in the United Kingdom.

307B

(1) This section supplements section 303(1)(ib).

(2) “Coal” has the meaning given by Article 2 of Council Regulation (EC) No. 1407/2002 (state aid to coal industry).

(3) The production of coal includes the extraction of it.

307C

In section 303(1)(ic) “steel” means any of the steel products listed in Annex 1 to the Guidelines on national regional aid (2006/C 54/08), published in the Official Journal on 4 March 2006.

Power to treat VCT-in-liquidation as VCT

Meaning of “merger” and “successor company”

Value received by investor during 6 year period: loans

Income charged at the dividend ordinary rate: other persons

General restrictions on sideways relief and capital gains relief

74A

(1) This section applies if—

(a) during a tax year an individual carries on one or more trades, otherwise than as a partner in a firm, in a non-active capacity (see section 74C), and

(b) the individual makes a loss in any of those trades (an “affected loss”) in that tax year.

(2) There is a restriction on the amount of sideways relief and capital gains relief which (after applying the restrictions under the other provisions of this Chapter) may be given to the individual for any affected loss (but see subsections (7) and (8)).

(3) The restriction is that the total amount of the sideways relief and capital gains relief given to the individual for all the affected losses must not exceed the cap for that tax year.

(4) The cap for any tax year is £25,000.

(5) The Treasury may by order amend the sum for the time being specified in subsection (4).

(6) If—

(a) in a tax year an individual makes a loss to which the restriction under section 103C (losses in trade carried on by non-active or limited partner) applies, and

(b) sideways relief or capital gains relief is given to the individual for that loss,

the amount of the cap under this section for the tax year in the case of the individual is reduced by the amount of that loss.

(7) The restriction under this section does not apply to so much of any affected loss as derives from qualifying film expenditure (see section 74D).

(8) The restriction under this section does not affect the giving of sideways relief for a loss made in a trade against the profits of that trade.

(9) In this section “trade” does not include a trade which consists of the underwriting business of a member of Lloyd's (within the meaning of section 184 of FA 1993).

(10) For the purposes of this section—

(a) capital gains relief is, in relation to a loss, the treatment of a loss as an allowable loss by virtue of section 261B of TCGA 1992 (use of trading loss as a CGT loss), and

(b) capital gains relief is given for a loss when it is so treated.

74B

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74C

(1) For the purposes of section 74A an individual carries on a trade in a non-active capacity during a tax year if the individual—

(a) carries on the trade at a time during the year, and

(b) does not devote a significant amount of time to the trade in the relevant period for the tax year.

(2) For the purposes of this section an individual devotes a significant amount of time to a trade in the relevant period for a tax year if, in the relevant period, the individual spends an average of at least 10 hours a week personally engaged in activities of the trade and those activities are carried on—

(a) on a commercial basis, and

(b) with a view to the realisation of profits as a result of the activities.

(3) For this purpose “the relevant period” means—

(a) where the individual first started to carry on the trade less than six months before the end of the tax year, the period of six months beginning with the date on which the individual first started to carry on the trade;

(b) where the individual permanently ceased to carry on the trade less than six months after the start of the tax year, the period of six months ending with the date on which the individual permanently ceased to carry on the trade;

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) If—

(a) any relief is given on the assumption that the individual devoted or will devote a significant amount of time to the trade in the relevant period for a tax year, but

(b) the individual in fact failed or fails to do so,

the relief is withdrawn by the making of an assessment to income tax under this section.

74D

(1) For the purposes of sections 74ZA and 74A expenditure is qualifying film expenditure if—

(a) it is deducted under a relevant film provision for the purposes of calculating the profits of a trade, or

(b) it is incidental expenditure which (although not deducted under a relevant film provision) is incurred in connection with the production of a film, or the acquisition of the original master version of a film, in relation to which expenditure is so deducted.

(2) Expenditure is incidental if it is on management, administration or obtaining finance.

(3) The extent to which expenditure is within subsection (1)(b) is determined on a just and reasonable basis.

(4) For the purposes of sections 74ZA and 74A the amount of any loss that derives from qualifying film expenditure is determined on a just and reasonable basis.

(5) In this section—

“the acquisition of the original master version of a film” has the same meaning as in Chapter 9 of Part 2 of ITTOIA 2005 (see sections 130 and 132 of that Act),

“film” is to be read in accordance with paragraph 1 of Schedule 1 to the Films Act 1985, and

“a relevant film provision” means any one of sections 137 to 140 of ITTOIA 2005 (relief for certified master versions of films).

Income charged at the trust rate and the dividend trust rate

Limit on reliefs in any tax year not to exceed cap for tax year

Maximum risk finance investments during period B requirement

The spending of money raised by SEIS investment requirement

The trading requirement

Amount of repayments etc where there is more than one issue of shares

The qualifying subsidiaries requirement

Cases where maximum SEIS relief not obtained

Repayment of authorised minimum within 12 months

Maximum amount for cases outside section 257MNA

No previous other risk capital scheme investments

Ceasing to meet trading requirement: administration etc

572A

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581A

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Individuals to whom remittance basis applies

670A

(1) This section applies if—

(a) accrued income profits are made by an individual as a result of a transfer of foreign securities, and

(b) section 809B, 809D or 809E (remittance basis) applies to the individual for the tax year in which the profits are made.

(2) Treat the accrued income profits as relevant foreign income of the individual.

(3) For the purposes of Chapter A1 of Part 14 (remittance basis)—

(a) if the individual is the transferor—

(i) treat any consideration for the transfer as deriving from the accrued income profits, and

(ii) if on the transfer the individual does not receive consideration of an amount equal to (or exceeding) the market value of the securities, treat the securities as deriving from the accrued income profits, and

(b) if the individual is the transferee, treat the securities as deriving from the accrued income profits.

(4) For the purposes of this section securities are “foreign” if income from them would be relevant foreign income.

735A

(1) For the purposes of section 735—

(a) place the benefits mentioned in Step 1 in the order in which they were received by the individual (starting with the earliest benefit received),

(b) deduct from those benefits any benefit so far as—

(i) chargeable gains (or offshore income gains) are treated as mentioned in section 734(1)(d) as accruing by reference to the benefit,

(ii) income is treated as mentioned in section 735AG(1)(b) as arising by reference to the benefit under section 643A, 643J or 643L of ITTOIA 2005 (settlements: benefits charge), or

(iii) income is treated as arising by reference to the benefit under section 732(2) and that income is identified in a foreign income claim,

(c) place the income mentioned in Step 3 for the tax years mentioned in Step 4 (“the relevant income”) in the order determined under subsection (3),

(d) deduct from that income any income that may not be taken into account because of section 743(1) or (2) (no duplication of charges),

(e) place the income treated under section 732(2) as arising to the individual in respect of the benefits in the order in which it is treated as arising (starting with the earliest income treated as having arisen), and

(f) treat the income mentioned in paragraph (e) as related to—

(i) the benefits, and

(ii) the relevant income,

by matching that income with the benefits and the relevant income (in the orders mentioned in paragraphs (a), (c) and (e)).

(2) In subsection (1) references to a step are to a step in section 733(1).

(3) The order referred to in subsection (1)(c) is arrived at by taking the following steps.

Step 1

Find the relevant income for the earliest tax year (of the tax years referred to in subsection (1)(c)).

Step 2

Place so much of that income as is not foreign in the order in which it arose (starting with the earliest income to arise).

Step 3

After that, place so much of that income as is foreign in the order in which it arose (starting with the earliest income to arise).

Step 4

Repeat Steps 1 to 3.

For this purpose, read references to the relevant income for the earliest tax year as references to the relevant income for the first tax year after the last tax year in relation to which those Steps have been undertaken.

(4) For the purposes of subsection (3) relevant income is “foreign” where it would be relevant foreign income if it were the individual's.

(5) For those purposes treat income for a period as arising immediately before the end of the period.

(6) Subsection (1)(d) does not apply if the income may not be taken into account because a person has been charged to income tax under section 731 by reason of the income.

Chapter 6 — Avoidance involving leases of plant and machinery

809ZA

(1) This section applies if—

(a) there is an unconditional obligation, under a lease of plant or machinery or a relevant arrangement, to make a relevant capital payment (at any time), or

(b) a relevant capital payment is made under such a lease or arrangement otherwise than in pursuance of such an obligation.

(2) The lessor is treated for income tax purposes as receiving income attributable to the lease of an amount equal to the amount of the capital payment.

(3) If subsection (1)(a) applies, the income is treated as income for the period of account in which there is first an obligation of the kind mentioned there.

(4) If subsection (1)(b) applies, the income is treated as income for the period of account in which the capital payment is made.

(5) For the meaning of “capital payment” and “relevant capital payment”, see section 809ZE.

(6) For the meaning of other expressions used in this section or section 809ZC, 809ZD or 809ZE, see section 809ZF.

809ZB

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809ZC

(1) This section applies if section 809ZA applies in relation to a lease of plant or machinery and other property (see section 809ZF(3)).

(2) The relevant capital payment is to be apportioned, on a just and reasonable basis, between—

(a) the plant and machinery, and

(b) the other property.

(3) If the income (if any) received by the lessor that is attributable to any of the plant or machinery is chargeable to tax under Part 3 of ITTOIA 2005 (property income), treat that plant or machinery as falling within subsection (2)(b) (and not subsection (2)(a)).

(4) Section 809ZA(2) has effect as if the reference to the amount of the capital payment were to such amount as is apportioned under subsection (2) in respect of the plant or machinery within subsection (2)(a).

809ZD

(1) This section applies for income tax purposes if—

(a) section 809ZA applies by virtue of subsection (1)(a) of that section, and

(b) at any time, the lessor reasonably expects that the relevant capital payment will not be paid (or will not be paid in full).

(2) For the purposes of calculating the profits of the lessor, a deduction is allowed for the period of account which includes that time.

(3) The amount of the deduction is equal to the amount reasonably expected not to be paid.

(4) No other deduction is allowed in respect of the matters mentioned in subsection (1).

Chapter A1 — Remittance basis

Introduction

809A

This Chapter provides for an alternative basis of charge in the case of individuals who were not domiciled in the United Kingdom in tax years before tax year 2025-26 ....

Application of remittance basis

809B

(1) This section applies to an individual for a tax year if ...—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

(a) the individual is UK resident for that year ,

(b) the individual is not domiciled in the United Kingdom in that year ..., and

(1A) Section 835BA (deemed domicile) applies for the purposes of subsection (1)(b).

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Sections 42 and 43 of TMA 1970 (procedure and time limit for making claims), except section 42(1A) of that Act, apply in relation to a claim under this section as they apply in relation to a claim for relief.

809C

(1) This section applies to an individual for a tax year if ...—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

(a) the individual is aged 18 or over in that year, and

(b) the individual meets ... the 12-year residence test or the 7-year residence test for that year.

(1ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1A) An individual meets the 12-year residence test for a tax year if the individual—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) has been UK resident in at least 12 of the 14 tax years immediately preceding that year.

(1B) An individual meets the 7-year residence test for a tax year if the individual—

(a) does not meet ... the 12-year residence test for that year, but

(b) has been UK resident in at least 7 of the 9 tax years immediately preceding that year.

(2) A claim under section 809B by the individual for that year must contain a nomination of the income or chargeable gains of the individual for that year to which section 809H(2) is to apply.

(3) The income or chargeable gains nominated must be part (or all) of the individual's foreign income and gains for that year.

(4) The income and chargeable gains nominated must be such that the relevant tax increase does not exceed —

(za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(a) for an individual who meets the 12-year residence test for that year, £60,000;

(b) for an individual who meets the 7-year residence test for that year, £30,000.

(5) “The relevant tax increase” is—

(a) the total amount of income tax and capital gains tax payable by the individual for that year, minus

(b) the total amount of income tax and capital gains tax that would be payable by the individual for that year apart from section 809H(2).

(5A) The references to income tax in subsection (5) do not include income tax under section 424 (gift aid).

(6) See section 809Z7 for the meaning of an individual's foreign income and gains for a tax year.

809D

(1) This section applies to an individual for a tax year if—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

(a) the individual is UK resident for that year ,

(b) the individual is not domiciled in the United Kingdom in that year ..., and

unless condition A or condition B is met.

(1A) Condition A is that ... conditions A to F in section 828B are met.

(1B) Condition B is that the individual gives notice in a return under section 8 of TMA 1970 that this section is not to apply in relation to the individual for that year.

(2) The amount of an individual's “unremitted” foreign income and gains for a tax year is—

(a) the total amount of what would (if this section applied) be the individual's foreign income and gains for that year, minus

(b) the total amount of those income and gains that are remitted to the United Kingdom in that year.

809E

(1) This section applies to an individual for a tax year if—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

(a) the individual is UK resident for that year,

(b) the individual is not domiciled in the United Kingdom in that year ...,

(c) for that year the individual either has no UK income or gains or has no UK income and gains other than taxed investment income not exceeding £100.

(d) no relevant income or gains are remitted to the United Kingdom in that year, and

(e) either—

(i) the individual has been UK resident in not more than 6 of the 9 tax years immediately preceding that year, or

(ii) the individual is under 18 throughout that year

unless the individual gives notice in a return under section 8 of TMA 1970 that this section is not to apply in relation to the individual for that year.

(1A) Section 835BA (deemed domicile) applies for the purposes of subsection (1)(b).

(2) For the purposes of subsection (1)(c) the individual's UK income and gains for the tax year are the individual's income and chargeable gains for that year other than what would (if this section applied) be the individual's foreign income and gains for that year.

(2A) For the purposes of subsection (1)(c) “taxed investment income” means UK income or gains consisting of payments within section 946 from which a sum representing income tax has been deducted.

(3) For the purposes of subsection (1)(d) relevant income and gains are—

(a) what would (if this section applied) be the individual's foreign income and gains for the tax year mentioned in subsection (1), and

(b) the individual's foreign income and gains for every other tax year for which section 809B or 809D or this section applies to the individual.

Effect of section 809B, 809D or 809E applying

809F

(1) This section applies if section 809B, 809D or 809E applies to an individual for a tax year.

(2) The individual's relevant foreign earnings for that year are charged in accordance with section 22 or 26 of ITEPA 2003.

(3) The individual's relevant foreign income for that year is charged in accordance with section 832 of ITTOIA 2005.

(4) The individual's foreign chargeable gains for that year are charged in accordance with paragraph 1 of Schedule 1 to TCGA 1992.

(5) For the effect on amounts which count as employment income of the individual under certain provisions of Part 7 of ITEPA 2003 (employment-related securities), see Chapter 5A of Part 2 of that Act.

(5A) For the effect on amounts which count as employment income under Chapter 2 of Part 7A of ITEPA 2003, see sections 554Z9 to 554Z11 of that Act.

(6) Nothing in this section applies in relation to nominated income or chargeable gains (see section 809H).

809G

(1) This section applies if section 809B (claim for remittance basis to apply) applies to an individual for a tax year.

(2) For that year, the individual is not entitled to—

(a) any allowance under Chapter 2 of Part 3 (personal allowance and blind person's allowance),

(b) any tax reduction under Chapter 3 of that Part (tax reductions for married couples and civil partners), ...

(ba) any tax reduction under Chapter 3A of that Part (transferable tax allowance for married couples and civil partners), or

(3) See also section 1K(6) of TCGA 1992 (no annual exempt amount for chargeable gains).

809H

(1) This section applies if—

(a) section 809B (claim for remittance basis to apply) applies to an individual for a tax year (“the relevant tax year”),

(b) the individual is aged 18 or over in the relevant tax year, and

(1A) See section 809C..., (1A) and (1B) for when an individual meets ... the 12-year residence test or the 7-year residence test for a tax year.

(2) Income tax is charged on nominated income, and capital gains tax is charged on nominated chargeable gains, as if section 809B did not apply to the individual for the relevant tax year (and neither did section 809D).

(3) “Nominated” income or chargeable gains means income or chargeable gains nominated under section 809C in the individual's claim under section 809B for the relevant tax year.

(3A) If the individual is a Scottish taxpayer for the relevant tax year, the individual is to be treated for the purpose of calculating income tax charged by virtue of subsection (2) as if the individual were not a Scottish taxpayer for that year.

(3B) If the individual is a Welsh taxpayer for the relevant tax year, the individual is to be treated for the purpose of calculating income tax charged by virtue of subsection (2) as if the individual were not a Welsh taxpayer for that year.

(4) If the relevant tax increase would otherwise be less than the applicable amount, subsection (2) has effect as if—

(a) in addition to the income and gains actually nominated under section 809C in the individual's claim under section 809B for the relevant tax year, an amount of income had been nominated so as to make the relevant tax increase equal to the applicable amount, and

(b) the individual's income for that year were such that such a nomination could have been made (if that is not the case).

(5) “The relevant tax increase” is—

(a) the total amount of income tax and capital gains tax payable by the individual for the relevant tax year, minus

(b) the total amount of income tax and capital gains tax that would be payable by the individual for the relevant tax year apart from subsection (2).

(5A) The references to income tax in subsection (5) do not include income tax under section 424 (gift aid).

(5B) The applicable amount” is—

(za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(a) if the individual meets the 12-year residence test for the relevant tax year, £60,000;

(b) if the individual meets the 7-year residence test for the relevant tax year, £30,000.

(6) Nothing in subsection (4) affects what is regarded, for the purposes of section 809I or 809J, as nominated under section 809C.

809I

(1) This section applies if—

(a) any of an individual's nominated income and gains is remitted to the United Kingdom in a tax year, ...

(b) any of the individual's remittance basis income and gains has not been remitted to the United Kingdom in or before that year, and

(2) Income tax and capital gains tax are charged, for that year and subsequent tax years, as if the income and chargeable gains treated under section 809J as remitted to the United Kingdom by the individual in that tax year had been so remitted (and income and chargeable gains of the individual that were actually remitted in that year had not been).

(3) An individual's “nominated income and gains” are the total income and chargeable gains nominated by the individual under section 809C for the tax year mentioned in subsection (1)(a) or any earlier tax year (each such year for which the individual has made a nomination under that section being referred to as a “nomination year”).

(4) An individual's “remittance basis income and gains” are the foreign income and gains of the individual for all the tax years (up to and including the tax year mentioned in subsection (1)(a)) for which section 809B, 809D or 809E applies to the individual, apart from the individual's nominated income and gains.

(5) The £10 test is met for the tax year mentioned in subsection (1)(a) (“year X”) if, taking each nomination year separately, the cumulative total as respects at least one nomination year exceeds £10.

(6) In relation to a nomination year—

(a) “the cumulative total” means the sum, for all the tax years in aggregate up to and including year X, of the amounts of relevant income and gains remitted to the United Kingdom in those tax years from that nomination year, and

(b) “relevant income and gains” means the income and chargeable gains nominated by the individual under section 809C for that nomination year.

809J

(1) If section 809I applies, the following steps are to be taken for the purpose of determining the income or gains treated in a tax year (“the relevant tax year”) as remitted to the United Kingdom by the individual.

Step 1

Find the total amount of—

(a) the individual's nominated income and gains, and

(b) the individual's remittance basis income and gains,

that have been remitted to the United Kingdom in the relevant tax year.

This amount is “the relevant amount”.

Step 2

Find the amount of foreign income and gains of the individual for the relevant tax year (other than income or chargeable gains nominated under section 809C) that is within each of the categories of income and gains in paragraphs (a) to (h) of subsection (2).

If none of sections 809B, 809D and 809E apply to the individual for that year, treat those amounts as nil (and accordingly go to step 6).

Step 3

Find the earliest paragraph for which the amount determined under step 2 is not nil.

If that amount does not exceed the relevant amount, treat the individual as having remitted the income or gains within that paragraph (and for that tax year).

Otherwise, treat the individual as having remitted the relevant proportion of each kind of income or gains within that paragraph (and for that tax year).

“The relevant proportion” is the relevant amount divided by the amount determined under step 2 for that paragraph.

Step 4

Reduce the relevant amount by the amount taken into account under step 3.

Step 5

If the relevant amount (as reduced under step 4) is not nil, start again at step 3.

In step 3, read the reference to the earliest paragraph of the kind mentioned there as a reference to the earliest such paragraph which has not previously been taken into account under that step.

Step 6

If the relevant amount (as reduced) is not nil once steps 3 to 5 have been undertaken in relation to all paragraphs of subsection (2) for which the amount determined under step 2 is not nil, start again at step 2.

In step 2, read the reference to the foreign income and gains of the individual for the relevant tax year as a reference to such of the foreign income and gains of the individual for the appropriate tax year as had not been remitted by the beginning of the relevant tax year.

“The appropriate tax year” is the latest tax year which is—

(a) before the last tax year for which step 2 has been undertaken, and

(b) a tax year for which section 809B, 809D or 809E applies to the individual.

(2) The kinds of income and gains are—

(a) relevant foreign earnings (other than those subject to a foreign tax),

(b) foreign specific employment income (other than income subject to a foreign tax),

(d) foreign chargeable gains (other than gains subject to a foreign tax),

(e) relevant foreign earnings subject to a foreign tax,

(f) foreign specific employment income subject to a foreign tax,

(g) relevant foreign income subject to a foreign tax, and

(h) foreign chargeable gains subject to a foreign tax.

(3) In this section the individual's “nominated income and gains” are the total income and chargeable gains nominated by the individual under section 809C for the relevant tax year or any earlier tax year.

(4) In step 1 of subsection (1) the individual's “remittance basis income and gains” are the foreign income and gains of the individual for all the tax years (up to and including the relevant tax year) for which section 809B, 809D or 809E applies to the individual, apart from the individual's nominated income and gains.

(5) In step 6 of subsection (1) the reference to income or gains being remitted is—

(a) as respects any tax year before section 809I applies, to income or gains being remitted to the United Kingdom, and

(b) as respects any tax year in relation to which that section applies, to income or gains treated under this section as so remitted.

(6) In subsection (2) “foreign tax” means any tax chargeable under the law of a territory outside the United Kingdom.

Remittance of income and gains: introduction

809K

(1) Sections 809L to 809Z6 apply for the purposes of—

(a) this Chapter,

(b) sections 22 and 26 of ITEPA 2003 (relevant foreign earnings charged on remittance basis),

(c) Chapter 5B of Part 2 of that Act (taxable specific income from employment-related securities etc: internationally mobile employees),

(ca) sections 554Z9 to 554Z11 of that Act (employment income provided through third parties charged on remittance basis),

(d) section 832 of ITTOIA 2005 (relevant foreign income charged on remittance basis), and

(e) Schedule 1 to TCGA 1992 (UK resident individuals not domiciled in UK).

(2) Those sections—

(a) explain what is meant by income or chargeable gains being “remitted to the United Kingdom” (sections 809L to 809O),

(b) provide for the calculation of the amount remitted (section 809P),

(c) contain rules for attributing transfers from mixed funds to particular kinds of income and capital (sections 809Q to 809S),

(d) contain supplementary provision for certain cases (sections 809T and 809U), and

(e) treat income or chargeable gains as not remitted to the United Kingdom in certain cases (sections 809UA to 809Z6).

Remittance of income and gains: meaning of “remitted to the United Kingdom”

809L

(1) An individual's income is, or chargeable gains are, “remitted to the United Kingdom” if—

(a) conditions A and B are met,

(b) condition C is met, or

(2) Condition A is that—

(a) money or other property is brought to, or received or used in, the United Kingdom by or for the benefit of a relevant person, ...

(b) a service is provided in the United Kingdom to or for the benefit of a relevant person , or

(c) money or other property is used outside the United Kingdom (directly or indirectly) for the benefit in the United Kingdom of a relevant person,

(3) Condition B is that—

(a) the property, service or consideration for the service is (wholly or in part) the income or chargeable gains,

(b) the property, service or consideration—

(i) derives (wholly or in part, and directly or indirectly) from the income or chargeable gains, and

(ii) in the case of property or consideration, is property of or consideration given by a relevant person,

(c) the income or chargeable gains are used outside the United Kingdom (directly or indirectly) in respect of a relevant debt, or

(d) anything deriving (wholly or in part, and directly or indirectly) from the income or chargeable gains is used as mentioned in paragraph (c).

(4) Condition C is that qualifying property of a gift recipient—

(a) is brought to, or received or used in, the United Kingdom, and either—

(i) the property is enjoyed by a relevant person, or

(ii) as a result, a benefit is enjoyed by a relevant person,

(b) is consideration for a service that is enjoyed in the United Kingdom by a relevant person,

(ba) is used outside the United Kingdom (directly or indirectly) and as a result a benefit is enjoyed in the United Kingdom by a relevant person, or

(5) Condition D is that property of a person other than a relevant person (apart from qualifying property of a gift recipient)—

(a) is brought to, or received or used in, the United Kingdom, and either—

(i) the property is enjoyed by a relevant person, or

(ii) as a result, a benefit is enjoyed by a relevant person,

(b) is consideration for a service that is enjoyed in the United Kingdom by a relevant person,

(ba) is used outside the United Kingdom (directly or indirectly) and as a result a benefit is enjoyed in the United Kingdom by a relevant person, or

in circumstances where there is a connected operation.

(6) In a case where subsection (4)(a) , (b) or (ba) or (5)(a) , (b) or (ba) applies to the importation or use of property, the income or chargeable gains are taken to be remitted at the time the property , benefit or service is first enjoyed by a relevant person by virtue of that importation or use.

(7) In this section “relevant debt” means a debt that relates (wholly or in part, and directly or indirectly) to—

(a) property falling within subsection (2)(a),

(b) a service falling within subsection (2)(b),

(d) a service falling within subsection (4)(b),

(e) qualifying property dealt with as mentioned in subsection (5)(a), or

(f) a service falling within subsection (5)(b).

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) The cases in which property (including income or chargeable gains) is used in respect of a debt include cases where the property is used to pay interest on the debt and cases where the property is used to secure the debt.

(9A) For the purposes of this Chapter, any reference to property being brought to the United Kingdom includes—

(a) sending, or otherwise effecting a transfer of, the property to the United Kingdom, and

(b) in the case of intangible property, taking any steps, or permitting steps to be taken, that would result in property situated outside the United Kingdom becoming situated in the United Kingdom.

(9B) Sections 275 to 275C of TCGA 1992 (location of assets) apply for the purposes of subsection (9A)(b) as they apply for the purposes of TCGA 1992.

(9C) But subsection (9B) does not apply where the intangible property is a debt other than a judgment debt.

(10) This section is subject to sections 809V to 809Z6 (property treated as not remitted to the United Kingdom).

809M

(1) This section applies for the purposes of this Chapter.

(2) A “relevant person” is—

(a) the individual,

(b) the individual's husband or wife,

(d) a child or grandchild of a person falling within any of paragraphs (a) to (c), if the child or grandchild has not reached the age of 18,

(e) a close company in which a person falling within any other paragraph of this subsection is a participator or a company which is a 51% subsidiary of such a close company,

(f) a company in which a person falling within any other paragraph of this subsection is a participator, and which would be a close company if it were resident in the United Kingdom, or a company which is a 51% subsidiary of such a company,

(g) the trustees of a settlement of which a person falling within any other paragraph of this subsection is a beneficiary, or

(h) a body connected with such a settlement.

(3) For that purpose—

(a) two people living together as if they were a married couple or civil partners are treated as if they were spouses or civil partners of each other,

(c) “close company” is to be read in accordance with Chapter 2 of Part 10 of CTA 2010 (see in particular section 439 of that Act),

(ca) “participator”, in relation to a close company, means a person who is a participator in relation to the company for the purposes of section 455 of CTA 2010 (see sections 454 and 455(5) of that Act) and, in relation to a company that would be a close company if it were resident in the United Kingdom, means a person who would be such a participator if it were a close company,

(cb) “51% subsidiary” has the same meaning as in the Corporation Tax Acts (see Chapter 3 of Part 24 of CTA 2010),

(d) “settlement” and “settlor” have the same meaning as in Chapter 2 of Part 9,

(e) “beneficiary”, in relation to a settlement, means any person who receives, or may receive, any benefit under or by virtue of the settlement,

(f) “trustee” has the same meaning as in section 993 (see, in particular, section 994(3)), and

(g) a body is “connected with” a settlement if the body falls within section 993(3)(c), (d), (e) or (f) as regards the settlement.

809N

(1) This section applies for the purposes of determining whether or not income or chargeable gains of an individual are remitted to the United Kingdom by virtue of condition C in section 809L.

(2) A “gift recipient” means a person, other than a relevant person, to whom the individual makes a gift of money or other property that—

(a) is income or chargeable gains of the individual, or

(b) derives (wholly or in part, and directly or indirectly) from income or chargeable gains of the individual.

(3) The question of whether or not a person is a relevant person is to be determined by reference to the time when a gift is made.

(4) But, if a person to whom a gift is made subsequently becomes a relevant person, the person ceases to be a gift recipient.

(5) The individual “makes a gift of” property if the individual disposes of the property—

(a) for no consideration, or

(b) for consideration less than the full consideration in money or money's worth that would be given if the disposal were by way of a bargain made at arm's length;

but, in a case falling in paragraph (b), the individual is to be taken to make a gift of only so much of the property as exceeds the consideration actually given.

(6) A reference to the individual making a gift of property includes a case where—

(a) the individual retains an interest in the property, or

(b) an interest, right or arrangement enables or entitles the individual to benefit from the property.

(7) “Qualifying property”, in relation to a gift recipient, is—

(a) the property that the individual gave to the gift recipient,

(b) anything that derives (wholly or in part, and directly or indirectly) from that property, or

(c) any other property, but only if it is dealt with as mentioned in section 809L(4)(a), (b) , (ba) or (c) by virtue of an operation which is effected—

(i) with reference to the gift of the property to the gift recipient, or

(ii) with a view to enabling or facilitating the gift of the property to the gift recipient to be made.

(8) In subsection (7)—

(a) the reference in paragraph (b) to anything deriving from property, and

(b) the reference in paragraph (c) to other property,

includes a thing, or property, that does not belong to the individual but which the individual is enabled or entitled to benefit from by virtue of any interest, right or arrangement.

(9) Enjoyment by a relevant person of property , a benefit or a service is to be disregarded in any of these cases—

(a) in the case of enjoyment of property or a service, if the property or service is enjoyed virtually to the entire exclusion of all relevant persons,

(aa) in the case of enjoyment of a benefit—

(i) if the qualifying property being dealt with as mentioned in section 809L(4)(a) or (ba) results in a benefit being enjoyed by relevant persons and persons who are not relevant persons, and

(ii) the enjoyment by all relevant persons is no more than negligible,

(b) if full consideration in money or money's worth is given by a relevant person for the enjoyment, or

(c) if the property , benefit or service is enjoyed by relevant persons in the same way, and on the same terms, as it may be enjoyed by the general public or by a section of the general public.

809O

(1) This section applies for the purposes of determining whether or not income or chargeable gains of an individual are remitted to the United Kingdom by virtue of condition D in section 809L.

(2) For the purposes of section 809L(5), the question of whether or not the person whose property is dealt with as mentioned in paragraph (a), (b) , (ba) or (c) of section 809L(5) is a relevant person is to be determined by reference to the time when the property is so dealt with.

(3) A “connected operation”, in relation to property dealt with as mentioned in section 809L(5)(a), (b) , (ba) or (c), means an operation which is effected—

(a) with reference to a qualifying disposition, or

(b) with a view to enabling or facilitating a qualifying disposition.

(4) A “qualifying disposition”is a disposition that—

(a) is made by a relevant person,

(b) is made to, or for the benefit of, the person whose property is dealt with as mentioned in section 809L(5)(a), (b) , (ba) or (c), and

(c) is a disposition of money or other property that is, or derives (wholly or in part, and directly or indirectly) from, income or chargeable gains of the individual.

(5) But a disposition of property is not a qualifying disposition if the disposition is, or is part of, the giving of full consideration in money or money's worth for the dealing that falls within section 809L(5)(a), (b) , (ba) or (c).

(6) Enjoyment by a relevant person of property , a benefit or a service is to be disregarded in any of these cases—

(a) in the case of enjoyment of property or a service, if the property or service is enjoyed virtually to the entire exclusion of all relevant persons,

(aa) in the case of enjoyment of a benefit—

(i) if the property being dealt with as mentioned in section 809L(5)(a) or (ba) results in a benefit being enjoyed by relevant persons and persons who are not relevant persons, and

(ii) the enjoyment by all relevant persons is no more than negligible,

(b) if full consideration in money or money's worth is given by a relevant person for the enjoyment, or

(c) if the property , benefit or service is enjoyed by relevant persons in the same way, and on the same terms, as it may be enjoyed by the general public or by a section of the general public.

Remittance of income and gains: amount remitted

809P

(1) The amount of income or chargeable gains remitted to the United Kingdom is to be determined as follows.

(2) If the property, service or consideration is the income or chargeable gains, the amount remitted is equal to the amount of the income or chargeable gains.

(3) If the property, service or consideration derives from the income or chargeable gains, the amount remitted is equal to the amount of income or chargeable gains from which the property, service or consideration derives.

(4) If the income or chargeable gains are used as mentioned in section 809L(3)(c), the amount remitted is equal to the amount of income or chargeable gains used; but this is subject to subsection (10).

(5) If anything deriving from the income or chargeable gains is used as mentioned in section 809L(3)(c), the amount remitted is equal to the amount of income or chargeable gains from which what is used derives; but this is subject to subsection (10).

(6) In a case falling within section 809L(4)(a) , (b) or (ba), the amount remitted is equal to the amount of the relevant income or chargeable gains.

(7) In a case falling within section 809L(4)(c), the amount remitted is equal to the amount of the relevant income or chargeable gains; but this is subject to subsection (10).

(8) In a case falling within section 809L(5)(a) , (b) or (ba), the amount remitted is equal to the amount of the income or chargeable gains referred to in section 809O(4)(c).

(9) In a case falling within section 809L(5)(c), the amount remitted is equal to the amount of the income or chargeable gains referred to in section 809O(4)(c); but this is subject to subsection (10).

(10) If the debt is only partly in respect of the property or service, the amount remitted is (if it would otherwise be greater) limited to the amount the debt would be if it were wholly in respect of the property or service.

(11) In subsections (6) and (7) “relevant income or chargeable gains” means—

(a) if the qualifying property falls within section 809N(7)(a), the income or gains—

(i) of which the qualifying property consists, or

(ii) from which the qualifying property derives;

(b) if the qualifying property falls within section 809N(7)(b), the income or gains—

(i) of which the property given to the gift recipient consisted, or

(ii) from which that property derived;

(i) of which the property given to the gift recipient consists, or

(ii) from which that property derives.

(12) If the amount remitted (taken together with any amount previously remitted that has been charged to income tax or capital gains tax) would otherwise exceed the amount of the income or chargeable gains, the amount remitted is limited to the amount which (when taken together with any amount previously remitted that has been charged to income tax or capital gains tax) is equal to the amount of the income or chargeable gains.

(13) If the property forms part of a set only part of which is in the United Kingdom, the amount remitted is such portion of what it would have been had the complete set been brought to, or received or used in, the United Kingdom when the part was as is just and reasonable (having regard to the part of the set which is there).

Remittance of income and gains: transfers from mixed funds

809Q

(1) This section applies for the purposes mentioned in subsection (2) where condition A in section 809L is met and—

(a) the property or consideration for the service is (wholly or in part), or derives (wholly or in part, and directly or indirectly) from, a transfer from a mixed fund, or

(b) a transfer from a mixed fund, or anything deriving (wholly or in part, and directly or indirectly) from such a transfer, is used as mentioned in section 809L(3)(c).

(1A) But this section must be read subject to section 809RA.

(2) The purposes referred to in subsection (1) are—

(a) determining whether condition B in section 809L is met, and

(b) if it is met, determining (under section 809P) the amount of income or chargeable gains remitted.

(3) The extent to which the transfer is of the individual's income or chargeable gains is to be determined as follows.

Step A1

Find the amount (if any) of income or capital of the individual for the relevant tax year in the mixed fund immediately before the transfer that is TRF capital.

If the amount of the transfer is equal to, or less than, the amount of TRF capital, treat the transfer as containing only TRF capital.

Otherwise—

treat so much of the transfer as does not exceed the amount of the TRF capital as being comprised of TRF capital, and

apply the following steps to the remainder of the transfer.

Step 1

For each of the categories of income and capital in paragraphs (a) to (i) of subsection (4), find (applying section 809R) the amount of income or capital of the individual for the relevant tax year in the mixed fund immediately before the transfer.

“The relevant tax year” is the tax year in which the transfer occurs.

Step 2

Find the earliest paragraph for which the amount determined under step 1 is not nil.

If that amount does not exceed the amount of the remainder, treat the remainder as containing the income or capital within that paragraph (and for that tax year).

Otherwise, treat the remainder as containing the relevant proportion of each kind of income or capital within that paragraph (and for that tax year).

“The relevant proportion” is the amount of the remainder divided by the amount determined under step 1 for that paragraph.

Step 3

Treat the amount of the remainder as reduced by the amount taken into account under step 2.

Step 4

If the amount of the remainder (as reduced under step 3) is not nil, start again at step 2.

In step 2, read the reference to the earliest paragraph of the kind mentioned there as a reference to the earliest such paragraph which has not previously been taken into account under that step in relation to the remainder.

Step 5

If the amount of the remainder (as reduced under step 3) is not nil once steps 2 and 3 have been undertaken in relation to all paragraphs of subsection (4) for which the amount determined under step 1 is not nil, start again at step 1.

In step 1, read the reference to the relevant tax year as a reference to the tax year immediately before the last tax year for which step 1 has been undertaken in relation to the transfer.

(4) The kinds of income and capital are—

(a) employment income (other than income within paragraph (b), (c) or (f)),

(b) relevant foreign earnings (other than income within paragraph (f)),

(d) relevant foreign income (other than income within paragraph (g)),

(e) foreign chargeable gains (other than chargeable gains within paragraph (h)),

(f) employment income subject to a foreign tax,

(g) relevant foreign income subject to a foreign tax,

(h) foreign chargeable gains subject to a foreign tax, and

(i) income or capital not within another paragraph of this subsection.

(5) In subsection (4) “foreign tax” means any tax chargeable under the law of a territory outside the United Kingdom.

(6) In this section “mixed fund” means money or other property which, immediately before the transfer, contains or derives from—

(a) more than one of the kinds of income and capital mentioned in subsection (4), ...

(b) income or capital for more than one tax year , or

(7) References in this section to the amount of the transfer include the market value of it.

(8) References in this section and section 809R to anything deriving from income or capital within paragraph (i) of subsection (4) do not include—

(a) income or gains within any of paragraphs (a) to (h) of that subsection, or

(b) anything deriving from such income or gains.

(9) For the purposes of this Chapter “TRF capital” means any amount that—

(a) is qualifying overseas capital (within the meaning of Part 1 of Schedule 10 to FA 2025) as a result of paragraph 2 of that Schedule, and

(b) is designated qualifying overseas capital for the purposes of that Part of that Schedule (and see paragraph 8(7) which provides for qualifying overseas capital to be treated as designated qualifying overseas capital from the start of the tax year to which the return in which it is designated relates).

809R

(1) Subsections (2) to (8) apply for the purposes of step 1 of section 809Q(3) (composition of mixed fund).

(2) Treat property which derives wholly or in part (and directly or indirectly) from an individual's income or capital for a tax year as consisting of or containing that income or capital.

(3) If a debt relating (wholly or in part, and directly or indirectly) to property is at any time satisfied (wholly or in part) by—

(a) an individual's income or capital for a tax year, or

(b) anything deriving (directly or indirectly) from such income or capital,

from that time treat the property as consisting of or containing the income or capital if and to the extent that it is just and reasonable to do so.

(4) Treat an offshore transfer from a mixed fund as containing the appropriate proportion of each kind of income or capital in the fund immediately before the transfer.

“The appropriate proportion” means the amount (or market value) of the transfer divided by the market value of the mixed fund immediately before the transfer.

(4A) For the purposes of subsection (4)—

(a) TRF capital is to be treated as a kind of income or capital, and

(b) TRF capital is not to be regarded as any other kind of income or capital.

(5) A transfer from a mixed fund is an “offshore transfer” for the purposes of subsection (4) if and to the extent that neither section 809Q nor section 809RZA(2) applies in relation to it.

(6) Treat a transfer from a mixed fund as an “offshore transfer” (and neither section 809Q nor section 809RZA(2) as applying in relation to it, if they otherwise would do) if and to the extent that, at the end of a tax year in which it is made—

(a) neither section 809Q nor section 809RZA(2) applies in relation to it, and

(b) on the basis of the best estimate that can reasonably be made at that time, section 809Q will not apply in relation to it.

(7) In this section ‘mixed fund’ means money or other property containing or deriving from—

(a) more than one of the kinds of income and capital mentioned in section 809Q(4), ...

(b) income or capital for more than one tax year , or

(8) If section 809Q applies in relation to part of a transfer, apply that section in relation to that part before applying subsection (4) in relation to the rest of the transfer.

(9) If section 809Q applies in relation to more than one transfer from a mixed fund, when undertaking steps A1 and 1 in relation to the second or any subsequent transfer take into account the effect of steps A1 and 2 of section 809Q(3) (composition of transfer) as it applied in relation to each earlier transfer.

809S

(1) This section applies if, by reason of an arrangement the main purpose (or one of the main purposes) of which is to secure an income tax advantage or capital gains tax advantage, a mixed fund would otherwise be regarded as containing income or capital within any of paragraphs (f) to (i) of section 809Q(4).

(2) Treat the mixed fund as containing so much (if any) of the income or capital as is just and reasonable.

(3) “Arrangement” includes any scheme, understanding, transaction or series or transactions (whether or not enforceable).

(4) Income tax advantage” means—

(a) a relief from income tax or increased relief from income tax,

(b) a repayment of income tax or increased repayment of income tax,

(d) the avoidance of a possible assessment to income tax;

...

(4A) For the purposes of subsection (4)(c) and (d) it does not matter whether the avoidance or reduction is effected—

(a) by receipts accruing in such a way that the recipient does not pay or bear income tax on them, or

(b) by a deduction in calculating profits or gains.

(5) “Capital gains tax advantage” means—

(a) a relief from capital gains tax or increased relief from capital gains tax,

(b) a repayment of capital gains tax or increased repayment of capital gains tax,

(d) the avoidance of a possible assessment to capital gains tax.

Remittance of income and gains: supplementary

809T

(1) This section applies if—

(a) foreign chargeable gains accrue to an individual on the disposal of an asset, and

(b) the individual does not receive consideration for the disposal of an amount at least equal to the market value of the asset.

(2) For the purposes of this Chapter treat the asset as deriving from the chargeable gains.

809U

Where—

(a) income or foreign chargeable gains are treated as arising or accruing, and

(b) by virtue of anything done in relation to anything regarded as deriving from the income or chargeable gains, the income or chargeable gains would otherwise be regarded as remitted to the United Kingdom before the time when they are treated as arising or accruing,

treat the income or chargeable gains as remitted to the United Kingdom at that time.

Relief for money used to pay tax etc

809V

(1) Subsection (2) applies to income or chargeable gains of an individual if—

(a) the income or gains would (but for subsection (2)) be regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom,

(b) the money is brought to the United Kingdom by way of one or more direct payments to the Commissioners, and

(2) The income or chargeable gains are to be treated as not remitted to the United Kingdom to the extent that the payments do not exceed the applicable amount (as defined in section 809H).

(3) Subsection (2) does not apply to payments if or to the extent that they are repaid by the Commissioners.

809W

(1) This section applies to income or chargeable gains if—

(a) the income or gains would (but for subsection (2)) be regarded as remitted to the United Kingdom because conditions A and B in section 809L are met,

(b) condition A in section 809L is met because a service is provided in the United Kingdom (“the relevant UK service”), and

(c) condition B in section 809L is met because section 809L(3)(a) or (b) applies to the consideration for the relevant UK service (“the relevant consideration”).

(2) The income or chargeable gains are to be treated as not remitted to the United Kingdom if the following conditions are met; but this is subject to subsection (5).

(3) Condition A is that the relevant UK service relates wholly or mainly to property situated outside the United Kingdom.

(4) Condition B is that the whole of the relevant consideration is given by way of one or more payments to one or more bank accounts held outside the United Kingdom by or on behalf of the person who provides the relevant UK service.

(5) Subsection (2) does not apply if the relevant UK service relates (to any extent) to the provision in the United Kingdom of—

(a) a benefit that is treated as deriving from the income by virtue of section 735, or

(b) a relevant benefit within the meaning of section 87B of TCGA 1992 that is treated as deriving from the chargeable gains by virtue of that section.

(6) Sections 275 to 275C of TCGA 1992 (location of assets) apply for the purposes of subsection (3) as they apply for the purposes of TCGA 1992.

809X

(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 section 809Z).

(4) Clothing, footwear, jewellery and watches ... are exempt property if they meet the personal use rule (see section 809Z2).

(5) Property ... 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

809Y

(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 any 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

(4A) 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 traveller's cheque,a promissory note,a bill of exchange, andany other—instrument that is evidence of a debt, orvoucher, stamp or similar token or document which is capable of being exchanged for money, goods or services, and

“relevant rule” means—the public access rule,the personal use rule,the repair rule, andthe temporary importation rule.

(6) Subsection (1) does not apply to property that ceases to be exempt property by 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.

809Z

(1) Property meets the public access rule if conditions B and C are met.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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

(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.

(8A) 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.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

809Z1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

809Z2

(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—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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).

809Z3

(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

(7) “The relevant period” has the same meaning as in section 809Z.

809Z4

(1) Property meets the temporary importation rule if the total number of countable days (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—

(za) the property meets the public access rule,

(a) the property meets the personal use rule,

(b) the property meets the repair rule, ...

(ba) subsection (3A) applies to the property,

(d) all or any part of the income or chargeable gains contained in the property (or from which the property derives) is treated, or continues to be treated, under section 809VA(2), 809Y(8)(b), 809YC(2) or 809YF(4) as not remitted to the United Kingdom.

(3A) 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

(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

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).

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

809Z5

(1) The “notional remitted amount”, in relation to property, is the amount ... 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).

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

809Z6

(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,

(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.

(5) 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.

Interpretation of Chapter

809Z7

(1) This section applies for the purposes of this Chapter.

(2) An individual's “foreign income and gains” for a tax year are—

(a) the individual's relevant foreign earnings for that year,

(b) the individual's foreign specific employment income for that year,

(d) ... the individual's foreign chargeable gains for that year.

(3) An individual's “relevant foreign earnings” for a tax year are—

(a) if the individual does not meet the requirement of section 26A of ITEPA 2003 for that year, the individual's chargeable overseas earnings for that year, and

(b) otherwise, the individual's general earnings within section 26(1) of ITEPA 2003 for that year (non-UK earnings).

(4) An individual's “foreign specific employment income” for a tax year (“the relevant tax year”) consists of the income (if any) within subsections (4A) and (4B).

(4A) The income within this subsection is the individual's specific employment income for the relevant tax year so far as it consists of securities income that is “foreign” for the purposes of section 41F of ITEPA 2003.

(4B) The income within this subsection is any income, or any part of any income, of the individual—

(a) to which section 554Z9(2) or 554Z10(2) of ITEPA 2003 applies, and

(b) which consists of the value of a relevant step, or a part of the value of a relevant step, which is “for” the relevant tax year as determined under section 554Z4 of ITEPA 2003.

(5) An individual's “foreign chargeable gains” for a tax year are the chargeable gains accruing to the individual in that year on the disposal of foreign assets (within the meaning of Schedule 1 to TCGA 1992).

(6) In subsection (3)(a) “chargeable overseas earnings” has the same meaning as in section 22 of ITEPA 2003 (see section 23 of that Act).

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The 80% qualifying holdings condition: disposal of holding

940A

(1) This section applies if—

(a) the Commissioners for Her Majesty's Revenue and Customs hold one or more bonds tendered in accordance with section 939(4),

(b) the Commissioners wish to tender bonds in accordance with section 939(4A) in satisfaction of an amount payable to the relevant creditor, and

(c) the Commissioners consider that they do not hold a bond, or combination of bonds, that is appropriate for satisfying the amount payable.

(2) If requested to do so by the Commissioners, the bond issuer must secure that the Commissioners hold a bond, or combination of bonds, that the Commissioners consider to be appropriate for satisfying the amount payable.

(3) If requested to do so by the bond issuer, a person must assist the bond issuer to comply with subsection (2).

(4) The duty under subsection (2), or under subsection (3), does not apply if it would be impracticable for the bond issuer, or the other person, to comply with the duty.

(5) The matters which the Commissioners may take into account when considering whether or not a bond or combination of bonds is appropriate for satisfying the amount payable include—

(a) the value of a bond at the time of its issue,

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Income Tax Act 2007

Transfers between spouses or civil partners

Overview of Chapter

Cases where maximum SEIS relief not obtained

Receipts of value by and from connected persons etc

Restrictions on being an employee, partner or paid director

Maximum amount for cases outside section 257MNA

No previous other risk capital scheme investments

Cases where maximum SEIS relief not obtained

The property managing subsidiaries requirement

Cases where maximum SEIS relief not obtained

Limit on investment in shorter applicable period

Cases where maximum SEIS relief not obtained

Limit on investment in shorter applicable period

Loss of relief if shares disposed of within 5 years

Power to amend limits on amounts that may be invested

No entitlement to relief which would have been lost if it had already been obtained

Receipt of replacement value

The investment limits condition

The permitted maximum age condition

Power to make regulations as to procedure

Conversion of convertible shares and securities

The financial health requirement

The 70% qualifying holdings condition: disposal of holding

The UK permanent establishment requirement

Qualifying holdings: introduction

The risk-to-capital requirement

The no guaranteed loan requirement

Maximum risk finance investments when relevant holding is issued requirement

Maximum risk finance investments during the 5-year post-investment period requirement

The spending of money raised by SEIS investment requirement

How relief works

Limit on reliefs in any tax year not to exceed cap for tax year

Limit on reliefs in any tax year not to exceed cap for tax year

Receipt of replacement value

Call options

Value received where part of issue treated as made in previous tax year

Value received where part of issue treated as made in previous tax year

Receipt of replacement value

The requirement not to be interested in capital etc of social enterprise

Meaning of “qualifying trade”

Value received: receipts of insignificant value

Value received where part of issue treated as made in previous tax year

Receipts of value by and from connected persons etc

Acquisition value of qualifying investments

Qualifying holdings: introduction

The permitted maximum age condition

Maximum risk finance investments during the 5-year post-investment period requirement

The use of the money raised requirement

Maximum risk finance investments during the 5-year post-investment period requirement

The minimum investment on further issue condition

The control and independence requirement

Meaning of “qualifying trade”

The no business acquisition condition

Loan to invest in co-operative

Maximum risk finance investments when relevant holding is issued requirement

Maximum risk finance investments during the 5-year post-investment period requirement

196A

196B

196C

307A

307B

307C

Power to treat VCT-in-liquidation as VCT

Meaning of “merger” and “successor company”

Value received by investor during 6 year period: loans

Income charged at the dividend ordinary rate: other persons

General restrictions on sideways relief and capital gains relief

74A

74B

74C

74D

Income charged at the trust rate and the dividend trust rate

Limit on reliefs in any tax year not to exceed cap for tax year

Limit on reliefs in any tax year not to exceed cap for tax year

Maximum risk finance investments during period B requirement

The spending of money raised by SEIS investment requirement

The trading requirement

Amount of repayments etc where there is more than one issue of shares

The qualifying subsidiaries requirement