Private Clients - 10 Dec 2018
For a non-domiciled individual who is taxable on the remittance basis it is always desirable to operate multiple bank accounts which hold different types of income, capital or gains. However sometimes for whatever reason individuals end up with multiple sources mixed in one account. Once mixed it is very difficult if not impossible to clean this up without remitting the taxable income and gains to the UK.
Mixed fund cleansing is an interim measure which was introduced in 2017 and allows an individual to cleanse a mixed fund bank account. This temporary measure allows a taxpayer to identify and separate out the various types of income/capital gains/clean capital and transfer these to separate offshore accounts. Any funds which are identified as clean capital can then be moved to the UK as required.
Mixed fund cleansing is available for non-domiciled individuals (except formerly domiciled residents) who have been a remittance basis user at some point between 6 April 2008 and 5 April 2017. The mixed fund cleansing opportunity finishes on 5 April 2019 after which the usual mixed fund ordering rules will apply again.
In order to cleanse an account detailed calculations must be undertaken to analyse exactly what the account contains. At Frank Hirth we are able to review bank accounts and advise whether these are suitable for cleansing. We can carry out the mixed fund cleansing calculations and we can provide the required cleansing nomination forms.
If you would like to discuss further how we can help you with mixed fund cleansing please contact your usual FH adviser.
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