Q. My client is a UK resident, but non-UK domiciled and claims the remittance basis of taxation as they have significant income arising from their home country which they do not usually remit to the UK. To celebrate his daughter’s 17th birthday, he is considering buying her an Audi RS3 from his overseas income to practice driving on UK roads. What are the tax implications if the client’s overseas funds are used to acquire the vehicle?

A. The remittance basis not only applies to the direct foreign income or gains, in the forms of funds, but also when anything derived from the income or gain is remitted to and enjoyed in the UK under s809L Income Tax Act 2007 (TA 2007).