UK Consultation On Tax And Domicile Changes
The UK Government is consulting on proposed changes to the non-dom rules that would deem certain individuals to be domiciled in the country for income tax and capital gains tax (CGT) purposes.
Chancellor George Osborne announced last July that the Government intended to reform the taxation of UK resident individuals who are non-doms. Legislation will be introduced in Finance Bill 2016 to deem certain individuals, who would otherwise be non-domiciled in the UK as a matter of general law, to be domiciled in the country for the purposes of income tax and CGT.
The measure under consultation restricts access to the “Remittance Basis,” with the result that anyone deemed UK domiciled would be unable to access the Remittance Basis regime. Under the current rules, non-doms pay tax on income and gains outside the UK only when they are remitted to the UK using the Remittance Basis of taxation. Non-doms must pay an extra levy, the Remittance Based Charge (RBC), or pay the full amount of UK tax that would be charged to a resident.
The measure will have effect for most income tax and CGT purposes on and after April 6, 2017. The part of the measure affecting capital gains tax in respect of foreign chargeable gains accruing to temporary non-residents will not affect accruals arising in respect of periods of temporary non-residence beginning on or before July 7.
The Government intends to legislate in Finance Bill 2017 to ensure that long-term resident non-doms who set up an offshore trust before they become deemed-domiciled will not be taxed on trust income and gains that are retained in the trust.
The consultation will close on March 2.
Source: Tax-News
