Julian Smith, our Head of Tax, offers a quick round-up of the latest UK tax news:
Record low of non-doms in UK
Following a number of reforms in recent years the number of non-domiciled taxpayers in the UK has dropped from 98,500 to 78,000. Half of the decline is due to these wealthy ‘internationally mobile’ individuals leaving the UK. The remainder have switched to domiciled status, will pay UK tax on worldwide income and gains, and are potentially fully within the ambit of Inheritance Tax. Tax revenues have dropped significantly from £9.5 billion in 2016- 2017 to £7.54 billion in 2017-2018. HMRC claims total revenues have not been affected but it’s worth noting that this trend could have long-term consequences; over the last five years non-doms have contributed over £45 billion in UK tax.
Rise in tax penalties
New reports suggest that the UK tax authorities imposed a record £860m in penalties on individual taxpayers in the last tax year. The fines are up 24% from £694m in 2017/18 and are believed to be the result of more people struggling to make tax payments on time. If you find yourself facing a penalty it’s important to plan ahead, and negotiate a payment plan with HMRC to ease the pressure.
Renting or selling UK property
As reported in our Summer Update adjustments to the way UK property is taxed will come into force in April. Changes in the way lettings relief and Capital Gains Tax relief is calculated could impact you if you rent a UK property. It’s also worth bearing in mind that, if you are non-resident, selling a UK property whilst overseas is generally beneficial, enabling you to enjoy particular additional allowances.