Business investment relief (BIR) has been a feature of the UK tax system since April 2012 and it is unusual, being the only exception to the remittance basis of taxation that is ‘purpose-specific’. BIR allows UK resident non-doms to bring into the UK untaxed foreign income and foreign gains without making a taxable remittance of those funds. The purpose of the relief is to encourage foreign investment into UK commercial enterprise. However, as reliefs go, it is relatively unloved. Its uptake since inception has been limited but, thanks to the Autumn Statement 2015, it is back in the spotlight again as the Government announced a consultation on altering BIR to increase its use, with the aim of increasing investment into UK businesses.
In some respects, BIR is rather generous. There is no upper limit on the amount of foreign income and gains that can be brought in. The funds can be raised by way of a loan which is repaid using foreign income and gains if preferred. The investment has to be made into an unlisted company (which need not be a UK company) and the company’s activities can include (usually) developing or letting property, or research and development, in addition to trading (or investment into a holding company investing in these types of company), as long as the activity is being carried on on a commercial basis. There is no time limit on how long the investment can be held.