ACCA Advanced Taxation (ATX) Practice Exam

What must be claimed if unremitted overseas income and gains is less than £2,000?

1. It is automatically claimed

2. It must be claimed manually

3. It requires annual confirmation

4. There is no requirement to claim

The correct answer is: It is automatically claimed

In the context of unremitted overseas income and gains being less than £2,000, it is important to understand the UK's taxation rules regarding non-domiciliary individuals. For such individuals, any foreign income or gains that remain outside the UK and are below the threshold of £2,000 are automatically considered not to be subject to UK tax. This means that there is no obligation to report or claim these amounts, as they are exempt from taxation automatically. The principle behind this rule is to simplify tax compliance for individuals with small amounts of foreign income or gains, thereby easing the administrative burden. Since the income and gains involved do not meet the threshold that would require action, there is no need for a separate claim to be made for these amounts. This automatic exemption is particularly beneficial for individuals who may not have significant overseas income or who prefer not to deal with the complexities of claiming. In contrast, options that suggest a manual claim, need for annual confirmation, or any requirement to claim are not applicable in this scenario, as the small amount remains outside the purview of UK tax obligations automatically.