Inadvertent remittances are taxable

The taxpayer sold his family business in 2006 and the proceeds were deposited into a Guernsey bank account. In 2007 he moved with his family to Dubai and remained non-UK tax resident for more than five years. This resulted in the proceeds from the sale of the business being ‘clean capital’ for remittance purposes.

However inadvertently some income from overseas sources was added to the Guernsey account making it a mixed account (ITA 2007 s 809Q(6)). The taxpayer transferred money from the Guernsey account to a personal bank account in the Isle of Man which also became a mixed fund. He then transferred funds from that account to his personal account in Dubai to pay living expenses.

In 2009 the business – under its new owners - went into administration and the taxpayer’s family bought it back. In 2014 the taxpayer returned to the...