Private Client Legal Updates (7 July 2021)

• Published date: 28 July 2021
• Law Firm: Wedlake Bell
• Author: Ms Sally Spicer and Jenny Cutts

A summary of key legal updates in the Private Client sector over the past week is as follows.

Remittance basis and collateral in respect of relevant debts

HMRC has made a controversial change to its Residence, Domicile and Remittance Basis Manual ("RDRM") regarding collateral in respect of a "relevant debt". This relates to HMRC's previously stated view on the quantification (for remittance basis purposes) of foreign income and gains which are used as collateral for loans where the full value of the loan is remitted to the UK. The RDRM previously provided that the remittance would be capped at the level of the loan; however, this has now been changed so that, if the value of the collateral is higher, the taxable remittance is at the level of the collateral. However, another section of the RDRM still says the opposite. We understand that professional bodies are seeking clarification from HMRC...