New Tax Rules for UK Non-Domiciles are to come into effect from 6 April 2017.
Draft legislation on most of the changes has been included in the Finance Bill 2017 which was published on 5 December 2016. There have been some changes since the previous proposals, in particular the “cleansing” of mixed funds into clean capital, income and gains which was originally being offered for just one year from 6 April 2017 and has now been extended to two years.
Although the precise final rules might still change as the Bill progresses through Parliament, no major further changes are expected.
Given the timescales involved, non-UK domiciled persons who are likely to be affected by these new rules should review their arrangements now – particularly those who hold UK property through offshore companies or trusts. As ever, the right strategy will depend on your individual circumstances.
The new rules broadly affect persons in one of three categories:-
• those non-UK domiciliaries who have been tax resident in the UK for 15 tax years;
• those people who had a UK domicile of origin, acquired a non-UK domicile of choice and are now UK tax resident or may become UK tax resident in the future;
• those UK non-domiciles who own UK residential property through an offshore structure (trust, company or both).
There are also changes to the taxation of existing offshore trusts and two tax concessions relating to the revaluation of assets for Capital Gains Tax purposes and the reorganisation of mixed overseas funds.
Please contact us if we can be of assistance in connection with your UK tax affairs, or if you would like to receive news updates via our E-Bulletin service.