The government has published draft legislation which will cause fundamental changes to the tax position of many UK resident non domiciled individuals, with effect from 6th April 2017. Those affected particularly by these reforms are individuals resident in the UK for 15 out of the previous 20 tax years (or ‘long term non-doms’).
A non-dom may be affected in 2 ways:
- Increased tax liabilities if protective steps are not taken – the remittance basis will no longer be available for long term non-doms, who will become liable, annually, to tax on worldwide income and capital gains arising from personally held assets. Old trusts and offshore structures which hold such assets will need to be reviewed to assess the impact of the reforms. Offshore holdings may be restructured into more efficient vehicles such as “protected trusts” which can result in long term non-doms paying less tax than they do now.
- Increased reporting requirements on worldwide income & capital gains – under a variety of global transparency initiatives, governments around the world are sharing more information about accounts held in virtually every financial centre. Long term non-doms unable to claim the remittance basis, under the reforms, will have an obligation to disclose worldwide income and gains which HMRC did not previously require to be reported.
In order to explore re-structuring an individual’s affairs in the light of these reforms, please submit the following questionnaire online or call 0203 008 8100.
Take the questionnaire