Relief from income tax is given if income arising in a territory outside the UK cannot be remitted to the UK1. The provisions apply to all income arising outside the UK, not just to relevant foreign income. (The provisions apply to individuals and companies, unless the context indicates otherwise. Legislation is footnoted for both sets of provisions).
Reporting and claims
Relief for unremittable is not automatic. Income must first be reported, and then a claim for relief made in accordance with the provisions. Relief is contingent, in the sense that income will become taxable as soon as any restrictions on remittance are lifted.
The practical effect of the relief is that the income is included on the tax return in the year it arises, but if covered by a successful claim, the income will not be subject to UK taxes until the restrictions on remittance cease2.
The situation therefore needs to be monitored on an ongoing basis, as a tax liability will arise as soon as restrictions are lifted. A tax liability
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Web page updated on 17 Mar 2025 16:31