How does the arising basis differ from the remittance basis?
Answered 17 March 2026
Here is a comprehensive answer based on the available sources.
Arising Basis vs. Remittance Basis
What the law says
The two bases are fundamentally different in what income and gains are subject to UK tax, and when:
-
Arising basis: UK income and capital gains tax is due on all worldwide income and gains as they arise or accrue. Foreign income is charged to tax in the year in which it arises overseas, regardless of whether it is brought to the UK.
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Remittance basis: Foreign income and gains are only subject to UK tax to the extent they are remitted (brought) to the UK. Income or gains left offshore are not taxed in the year they arise.
HMRC guidance / practice
Eligibility and availability
- The remittance basis was historically available to UK residents who were not domiciled (and, before 2013/14, not ordinarily resident) in the UK. From 6 April 2013 to 5 April 2025, it was restricted to non-domiciled individuals only.
- From 6 April 2025, the remittance basis has been abolished. All UK residents are now taxed on the arising basis on their worldwide income and gains.
- For 2008-09 to 2024-25, a claim was generally required under s.809B ITA 2007 to use the remittance basis; without a valid claim, worldwide income and gains were charged on the arising basis.
Key trade-offs of the remittance basis (up to 2024-25)
| Feature | Arising Basis | Remittance Basis |
|---|---|---|
| Scope of charge | Worldwide income & gains | UK income/gains + foreign amounts remitted to UK only |
| Personal allowances | Retained | Lost (with limited exceptions) |
| CGT Annual Exempt Amount | Retained | Lost (with limited exceptions) |
| Remittance Basis Charge | N/A | Up to £30,000, £60,000 or £90,000 for long-term residents |
| Foreign losses | Allowable | Not generally allowable |
- Remittance basis users who claimed it lost their entitlement to UK personal tax allowances and the CGT Annual Exempt Amount.
- Long-term UK residents using the remittance basis may also have been liable to a Remittance Basis Charge (RBC) of £30,000, £60,000, or £90,000.
- Under the arising basis, foreign losses are allowable to the same extent that gains would be chargeable. Under the remittance basis, foreign losses are not treated in the same way.
- An individual could switch between the two bases year by year (but not mid-year).
Post-April 2025
- Although the remittance basis is abolished going forward, pre-6 April 2025 foreign income and gains that were within the remittance basis rules and are subsequently remitted to the UK after that date continue to be taxed at the usual rates, subject to the temporary repatriation facility (TRF).
Citation sources
Term Definition Arising Basis The basis of UK taxation for UK residents. It means that UK income and capital gains tax is due on all worldwide income and gains as they arise or accrue. Business Investment Relief An investment made by a relevant person using their foreign income or gains (or something derived from them) in a qualifying company from 6 April 2012. See RDRM34300 onwards. Connected Operation An operation which is effected with reference to a qualifying disposition RDRM33440, or with
With a few important exceptions (refer to RDRM32100 Exceptions to the claims requirements) individuals who used the remittance basis from 6 April 2008 to 5 April 2025: lost their entitlement to UK personal tax allowances (PAs) RDRM32040 for income tax purposes lost their Annual Exempt Amount (AEA) RDRM32040 for capital gains tax purposes. had to make a claim to use the remittance basis Note: It is no longer possible to use the remittance basis of taxation from 6 April 2025. In addition some remi
From 6 April 2025, the remittance basis of taxation has been abolished, with the concept of domicile as a relevant connecting factor in the tax system having been replaced by a system based on tax residence. From this date, all UK residents are taxed on the arising basis of assessment on their worldwide income and gains. This means that the 2024-25 tax year was the last year for which the remittance basis could be claimed, or could apply automatically. Any foreign income or gains that have arise
If an individual is domiciled or deemed domiciled* in the UK he or she is liable on gains arising from assets situated anywhere in the world. However, if the individual is not domiciled and not deemed domiciled* in the UK, he or she is still liable on gains arising from assets situated in the UK but may (if remittance basis is due) not be liable on gains arising from assets located outside the UK except to the extent that those gains are remitted to the UK. See CG25300-CG25431. ‘Domiciled in the
From 6 April 2025 all individuals who are resident in the UK are taxable on the arising basis and pay tax on their worldwide income and gains. So, on the arising basis, the foreign income of UK residents is charged to tax in the year in which it arises overseas. For example, an employee is taxed on the full amount of earnings from a foreign employment for the tax year. Likewise, any capital gains are subject to UK tax in the tax year in which the gain accrues. In most cases that is the year in w
Changes from 6 April 2025 The remittance basis has been abolished and new rules have been introduced from the 2025/26 tax year. The latest guidance can be found in RFIG for Residence and RDRM for Domicile manuals. Please note that cases which occur from 6 April 2025 onwards will be determined in accordance with the new rules For years before 2008-09 the remittance basis in respect of gains on non-UK assets was automatic and mandatory where an individual was resident or ordinarily resident*, but
The remittance basis had been available for many years, first appearing in tax legislation over 200 years ago. It largely applied to the taxation of foreign income and gains arising to UK residents who are either Not Ordinarily Resident and/or Not Domiciled within the UK. However, there were some differences between the treatment for foreign income arising from employment and that arising from investments, and between the availability of the remittance basis in respect of capital gains (restrict