From 6 April 2012 remittance basis taxpayers who bring their foreign income or gains to the UK and invest it in a target company may claim relief from the UK tax charge that would otherwise arise. The investment can be made in the form of money or other property derived from foreign income and gains from years in which a person was taxed on the remittance basis. The investor may be taxed on either the arising basis or the remittance basis in the tax year in which the investment is made and still benefit from the relief.
In order for the foreign income or gains to qualify for relief from UK tax, the following conditions must be met:
- the investment must be a qualifying investment made in a target company, within 45 days of the foreign income and gains being brought to the UK, and
- the taxpayer must claim relief from UK tax under this provision as part of their Self Assessment tax return
A qualifying investment for these purposes is obtaining newly issued shares in, or making a loan (secured or unsecured) to a target company.
A target company is an eligible trading company, an eligible stakeholder company or an eligible holding company.
If you would like to discuss Business Investment Relief or any other tax residence or domicile issues in more detail, then please contact us and speak to a member of our team.