Previously, the UK government announced reforms to taxation of resident non-domiciliaries goes ahead in April 2017. The HT Autumn Statement confirmed this.
The latest Newsletter from STEP summarised the recent announcement of the UK government to tax resident non-domiciliaries.
The statement made no room for further transitional concessions to help non-doms arrange their affairs in time. This is despite appeals from professional advisors for relief from capital gains tax or stamp duty. This included land tax for non-doms who elect to de-envelope their property structures.
Conder explains that the legislation will introduce a deemed-domicile status for various long-term non-doms. Those that previously had a UK domicile of origin, resulting in many being taxed in the UK on their worldwide income will also be affected.
The legislation is expected to also charge inheritance tax on UK residential property held indirectly by a non-dom through an offshore structure. This includes a company or a trust. Clarification whether trust income and gains could be taxed is still needed.
Furthermore, as from April 2017, the government has committed to amend the Business Investment Relief scheme rules. It will be easier for non-doms claiming the remittance basis to bring offshore money into the UK to invest in UK businesses.
Mark Davies is of opinion that ‘It is disappointing that the government has not announced any safe route to de-envelope properties’. He goes on to comment ‘So there may be a significant tax bill to extract properties from offshore structures that will give few tax benefits from April 2017’.
Finally, the implications of the UK government regarding taxation for non-resident domiciliaries created critic from all sources. Read the full article.
STEP Response to consultation
On 20 October, STEP’s UK Technical Committee published its response to the government’s consultation Reforms to the taxation of non-domiciliaries. This further consultation related to trust protections for deemed UK domicile for long-term residents.
- STEP Response (Reforms to the Taxation of Non-domiciliaries)
Source:
HT Treasury (Full statement, see page 37)
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