I am now less than four weeks from the 100 mile Prudential ride London cycle that I am doing in aid of Send a Cow. All donations will be gratefully accepted by Send a Cow in lieu of the pain I will face from the cycle 🙂
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On a more normal topic, I have been looking at the remittance basis rules in quite a lot of detail this week in the course of dealing with a Swiss account enquiry from HM Revenue & Customs (HMRC).
I have been reminded in the course of this how arbitrary tax rules often are and particularly the remittance rules.
A payment of tax made direct to HMRC from offshore is usually thought to not give rise to taxable remittances. The actual remittance rules themselves are however far more restrictive than that.
The remittance rule exemption for direct tax payments is that only a payment of the remittance basis charge (RBC) directly to HMRC is not considered a taxable remittance. So what happens if the direct tax payment arises on remitted gains or income? Very simply in that case a direct payment of tax to HMRC will be taxable itself as a remittance. What happens if the tax is a mix of both RBC and other tax, say on employment income and there are payments on account. Again in that case only the RBC and related payment on account are not taxable remittances.
So the long and the short of it is that when it comes to tax rules it pays to actually read the rules. That is so much better than relying on assumptions, which may not match what the rules specifically say for the circumstances involved.