Expats sometimes arrange for offshore income or gains to be used as collateral for a loan, which can make funds available in the UK which would otherwise not be. Accordingly, there is an argument to be made that where the 'remittance basis' applies to offshore gains or income, the use of a loan in the UK secured on these should be treated as a taxable remittance, and the tax law permits this.

HM Revenue and Customs (HMRC) decided, however, to apply a concession to not treat loans using offshore gains or income as collateral as taxable remittances where the loan was made on commercial terms and was fully serviced by remittances of foreign income or gains which were taxable.

That was where matters stayed until 4 August 2014. Then, without any announcement, HMRC changed its mind. Henceforth, such loans will be treated as a taxable remittance.

Transitional provisions have been put into effect to allow individuals to change their tax arrangements to avoid the potential double charge to tax. Such changes have to be notified to HMRC by 31 December 2015 and put into place by 5 April 2016.