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Past goods, present burdens

13 March 2008 / Simon McKie
Categories: Comment & Analysis , Income Tax
The new remittance basis legislation contains a fundamental flaw which could give rise to double taxation, warns SIMON MCKIE


  • Nature of income tax according to the House of Lords
  • The new remittance basis rules appear to have retrospective effect
  • Would a purposive construction of the new Schedule prevent retrospection?
  • HMRC's view on the legislation is unclear
  • The rules should be amended so that double taxation cannot occur

Extensive revisions are to be made to the draft legislation on the remittance basis which was published on 18 January 2008.

The revisions announced in the 2008 Budget notes do not however seem to correct a fundamental flaw in the draft legislation which on a literal reading would result in extensive retrospective tax charges on many taxpayers.

This article examines this structural flaw by reference to this simple example:

Mr A is a non-domiciled individual who has been...

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