Remittance basis and commercial loans

05 August 2014

HMRC have made an announcement that might affect some remittance basis taxpayers.

The announcement concerns individuals using the remittance basis of taxation. The law provides that anyone obtaining a loan which is secured using foreign income or gains that remain overseas is required to pay tax on any part of that loan which is remitted to the UK. There is an existing concession for commercial loan arrangements, but HMRC have now withdrawn this concession because of concerns that it has been exploited for uncommercial purposes.