ACCA Advanced Taxation (ATX) Practice Exam

When is the remittance basis available to UK residents deemed domiciled in the UK?

1. When unremitted income exceeds £1,000

2. Only if unremitted income is less than £2,000

3. When they have lived abroad for one year

4. When they have no UK income

The correct answer is: Only if unremitted income is less than £2,000

The remittance basis allows UK residents who are deemed domiciled in the UK to only pay tax on their UK income and any foreign income that they bring into the UK, rather than on their worldwide income. This basis is typically available to individuals who are UK residents but are not domiciled in the UK. In the context of UK residents deemed domiciled, the remittance basis is available if their unremitted foreign income is less than £2,000. This means that if the foreign income they have not brought into the UK is below this threshold, they can benefit from the remittance basis for taxation purposes. If the unremitted foreign income exceeds £2,000, they will be taxed on their worldwide income instead. The other details about the options clarify that the remittance basis is not contingent solely on thresholds related to UK income or living abroad for a short period, nor can it be claimed based merely on the absence of UK income. Instead, the limitation set at £2,000 directly influences eligibility for the remittance basis, making it a critical threshold for understanding how non-domiciled individuals are taxed in the UK.