How to separate income from capital?

[advisor31]

Say someone has a sum of money in a foreign country. This income is unremitted, no UK tax has been paid on it.

They have been in the UK for 10+ years, so they declare their income on the world arising basis. The snart thing to do is to have income from this money that does not land in the same account as that unremitted capital (otherwise, it creates a mix account, and the tax income cannot be remitted).

Problem: how to find a structure/a product that deposits the income in a different account from the capital? No online broker in the US will do that for example.

Thanks!

[bd6759]

I think you mean he has been taxed on the remittance basis, not the arising basis.

It's a little late to be thinkig about capital/income split. This should have been done 10 years ago, It is probably too late now.

[advisor31]

Hi, thanks for your response.

Let me try to clarify:

He was taxed in the past on the remittance basis. So he has money abroad that cannot be brought back to the UK.

But now, he is taxed on the world arising basis. So he is taxed on the income from that money. How can he separate the income from the capital, moving forward (say he received a dividend next year) so that he can then repatriate the income (on which he will have paid UK taxes)?

[maths]

Any monies arising henceforth on the unremitted capital should simply be credited to a separate clean account.

The unremitted monies from the past which comprise a mixed account could now be cleansed (assume not born in UK with a UK domicile of origin).

[advisor31]

Hi maths, thanks for your answer. I understand the need to get the income deposited to a different account. However, I couldn't find a bank or a broker who can do this, they all want to deposit the income (dividend or interest) to the same account. Do you know how a way to do this?

Thanks!