Representing the biggest reforms to taxation in a decade, and first announced in the Summer Budget of 2015, reforms to thetaxation of non-domiciliaries (“non-doms”) are due to come into force on 6 April 2017.
As recently as October, reports began to surface that the Treasury was in fact expected to ‘waterdown‘ its initial proposal to tax payouts to UK residents from offshore trusts. The thinking being that instead of taxing all the future gains of a trust following a payout, capital gains would be taxed when there was a payment to a UK resident.
There are even calls for elements of the bill to be put on hold until 2018 given the uncertainties implied by Brexit.
While we await the outcome of any review to the reforms, what do we need to know?
The overall message is that the UK government is seeking to reduce the tax advantages enjoyed by UK resident non-domiciled individuals, and those who will potentially be affected need to be aware of the changes and how they will impact their own UK tax position.
Who is affected?
Any UK resident non-domiciled individuals.
Anyone approaching 15 years UK tax residency.
Individuals with a UK domicile of origin considering a move back to the UK.
Any individual who holds UK residential property through an offshore company or trust.
More information can be found here: https://www.gov.uk/government/consultations/reforms-to-the-taxation-of-non-domiciles/reforms-to-the-taxation-of-non-domiciles