What is remittance and arising basis with regard to tax?
A UK resident, ordinarily resident and domiciled person will be taxed on what is known as the arising basis. This means that all of their income and gains will be taxed in the tax year when they are received.
A person who is not a UK domiciliary can choose to have their non-UK income and gains taxed in the UK only to the extent that they are brought into or enjoyed in the UK. These are called ‘remitted’ income and gains. Income and gains made abroad which are left abroad are called ‘unremitted’ income and gains.
Why do the two different rules exist? Besides just understanding the definition and rules, are there any helpful guides or tips on ways to use the laws and rules most efficiently?