Budget 2010 – The remittance basis
A further minor amendment to the remittance rules is to be introduced with effect from 6 April 2010. This change is relevant mainly to individuals who are resident but either not domiciled or not ordinarily resident in the UK.
Significant changes to the remittance basis of taxation were introduced in Finance Act 2008. One of these changes introduces the concept of a ‘relevant person’. A relevant person is widely defined and includes the individual, their spouse, civil partner, children and grandchildren under the age of 18. It also covers close companies and their subsidiaries in which such persons are participators.
This legislative amendment announced as part of the Budget makes clear the status of a subsidiary of a non-UK resident company which would be a close company if it was resident in the UK. From 6 April 2010 such companies will be within the definition of a ‘relevant person’ for the purposes of the remittance basis rules.