Low-earners' right to opt out of the remittance basis
The measure
Some minor changes have been made to the FA 2008 remittance rules to ease their impact on low-income individuals in receipt of foreign income and gains.
The legislation makes clear that certain non domiciled or not ordinarily resident individuals with annual foreign income and gains of less than £2,000 do not have to apply the remittance basis. If they prefer, they may choose to be taxed on their worldwide income instead.
The legislation has been modified to put beyond doubt the fact that low income non domiciled taxpayers have the same choice as individuals with foreign income and gains above the limit to choose or not choose the remittance basis.
The requirement to file a self-assessment tax return will also be removed for individuals who have overseas employment income of less than £10,000 and overseas bank interest of less than £100 in any tax year, all of which is subject to a foreign tax.
Who will be affected?
Individuals who are resident, but not domiciled or not ordinarily resident in the UK who have less than £2,000 of foreign income and gains.
When?
The modified rules come into retrospective effect from 6 April 2008.
We understand that it was never intended that employees with unremitted foreign income of less than £2,000 should be required to apply the remittance basis and this measure just confirms that this is the case.
