ACCA Advanced Taxation (ATX) Practice Exam

Is all remitted income taxed as overseas income according to UK tax regulations?

1. True

2. False

3. Only if it is capital gain income

4. Only if it is generated through investments

The correct answer is: True

The characterization of remitted income in UK tax regulations is an important aspect of understanding how overseas income is treated. In the UK, individuals who are deemed to be "resident but not domiciled" (often referred to as "non-doms") are taxed on their UK income on a worldwide basis and their foreign income only if it is "remitted" to the UK. When overseas income is remitted, it is indeed taxable in the UK, which reinforces the understanding that all remitted income is treated as overseas income. This means that any foreign income that is brought into the UK is subject to UK taxation, regardless of its origin—whether it comes from capital gains, employment, or other sources. Options that suggest limitations based on the type of income—whether it is capital gains or derived specifically from investments—do not align with the broad definition of remittance and its taxation under UK regulations. Therefore, the assertion that all remitted income is taxed as overseas income accurately captures the principle applied in these scenarios.