Many changes to the taxation of Non-Domiciled (“Non-Doms”) taxpayers will take effect from 6 April 2017.
Under the new arrangements from 6 April, the existing 17/20 rule for non-doms will be modified so that those who have been a UK resident for 15 of the 20 years will be deemed domiciled for UK tax purposes.
The deemed domicile status will apply to all taxes.
Individuals deemed domiciled under the new rules will no longer have the benefit of the remittance basis of taxation – the alternative tax treatment for non-doms with foreign income.
What is more, individuals born in the UK, but who have acquired a domicile of choice elsewhere, will be deemed domiciled in the UK if they are resident in the country.
This is a major reform of the non-dom tax regime and transitional provisions have been implemented which could be a benefit for all non-doms, not just those about to become deemed domciled.
i. All non-UK domiciled UK resident individuals (except returning non-doms) have a one–off opportunity to re-organise offshore mixed funds into their constituent parts. Allowing them to identify “clean capital” which can be remitted to the UK tax free;
ii. Individuals becoming deemed domiciled on 6 April 2017 under the 15 out of 20 year rule will be able to benefit from rebasing of their foreign situated capital assets to their market value on 5 April 2017, for Capital Gains Tax ("CGT") applies in certain cases when an asset is sold for more than it was originally purchased. The taxable gain (profit) may be triggered following the transfer of an asset, although commonly this would follow a sale. A number of tax reliefs are available to exempt or reduce the tax that may apply. Basic tax planning may... More purposes.
These mixed fund cleansing and rebasing opportunities are invaluable to long term residents of the UK
All non-domiciled individuals, whether they have been claiming the remittance basis or not, should review their affairs to see fi they can benefit from the transitional provisions.
Please contact our non-dom experts Julian Brooks and Jamie Favell to discuss how we can assist you.