Finance (No 2) Act 2017 introduced substantial changes to the taxation of foreign domiciliaries (see E6.323B for detailed commentary). An interim measure, introduced to assist foreign domiciliaries, with mixed fund accounts, who have been remittance basis users (whether automatic, see E6.324E, or as a result of making a claim, see E6.324F) at least once between 2008/09 and 2016/17 inclusive, is cleansing.
There was a two-year window (6 April 2017 to 5 April 2019) during which cleansing transfers and the associated nomination can take place.
Initial HMRC guidance ('Cleansing mixed funds') was issued on 31 January 2018 which was aimed primarily at ordinary taxpayers. Guidance on mixed fund cleansing was published in RDRM35600 in March 2022.
Various professional bodies (CIOT, STEP, ICAEW, and the Law Society) jointly compiled guidance for advisers on mixed fund cleansing in the form of a Q&A. The guidance was originally published in March 2018, and was updated in March 2019 to include comments from HMRC. The Q&A document is comprehensive and has numerous examples
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