From 6 April 2017 any individual who has been resident in the UK for at least 15 of the past 20 tax years will be deemed UK domiciled for tax purposes.
The remittance basis of taxation will no longer be an option for anyone who is deemed domiciled under these new rules. Their worldwide assets will be subject to UK income tax, 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 and inheritance tax.
In order to ease transition into these new rules a concession has been introduced so that taxpayers who become deemed UK domiciled on 6 April 2017 (and no later) and who do not have a UK domicile of origin, can rebase the value of assets to their current market value.
Assets held within overseas structures do not currently benefit from the proposed rebasing.
Where the assets were originally acquired with unremitted overseas income or gains there would still be tax on a remittance of proceeds in excess of the post 5 April 2017 gain.
It is intended that the rebasing election can be made on an asset by asset basis and there are a number of conditions including the requirement that the asset must have been foreign situs and owned on 8 July 2015 and the individual must have paid the remittance basis charge in any year before April 2017.
Please contact us if you would like to discuss how the non-dom reform impacts your tax affairs.