What does the term 'arising basis' refer to in taxation?

The term 'arising basis' in taxation refers to the principle that individuals and entities are taxed on their worldwide income, regardless of whether that income is brought into or remitted to the UK. This means that taxpayers must report and pay tax on all income earned globally in the tax year, not just the income generated within the UK or brought into the country.

For individuals who are tax residents in the UK, the arising basis ensures that all sources of income, such as earnings from employment, rental income, dividends, and interest, contribute to their tax liability. This principle is crucial for understanding how tax regulations apply to UK residents with international income streams.

In contrast, the other options mention aspects such as only taxing income when it is brought into the UK or limiting taxation to UK source income, which do not align with the definition of the 'arising basis.' This clarifies the scope and reach of taxation under this principle, highlighting the UK's approach to taxing its residents on a worldwide basis.