Expert Updates / Articles tagged "non-doms"

Non-UK domiciled individuals will be able to elect to be treated as domiciled in the UK for inheritance tax (‘IHT’) purposes under provisions contained in the draft Finance Bill 2013, published in December 2012. Where an election is made, gifts made by a UK domiciled spouse to his non-UK domiciled spouse will be free from UK IHT.

Changes to the measure announced at the time of the 2013 Budget mean that lifetime gifts made within the seven years before death will now also be able to benefit from the full spouse exemption even if no election was in place at the time of the gifts.

Borrowings secured against properties reduce their value for inheritance tax purposes, with only the net value being taxable. Damian Bloom, Private Client partner discusses new restrictions on the set-off of debts, if the borrowed money is used to buy assets which qualify for inheritance tax relief, or is taken offshore by a non-UK domiciled individual. This will have a significant impact on entrepreneurs using their houses as security for borrowings used in their businesses, as well as non-domiciliaries putting in place inheritance tax planning.

You should read this if you, or any of your clients, are non-UK domiciled, claimed the remittance basis of taxation for 2008/2009 and have not already made a loss election.

30-second summary

A non-UK domiciled individual who claimed the remittance basis of taxation in the 2008/2009 UK tax year only has until the end of this tax year (5 April 2013) to make a loss election. If he makes an election, he will be able to set losses, which accrue to him on non-UK assets (his ‘foreign losses’), off against his gains (foreign & UK). If an election is not made by then he will lose the opportunity to make an election.

If an individual does not make an election, he will not be able to deduct his foreign losses from his gains in calculating his taxable gains (unless he becomes UK domiciled at some point in the future). He will still be able to set his UK losses off against his UK gains, and any foreign gains which are remitted to the UK.

Whether or not it is appropriate for a non-UK domiciled individual to make a loss election will depend on his specific circumstances and advice should be sought.

At the end of last year the Government proposed new rules to enable non-doms to bring works of art to the UK for sale, without triggering tax liabilities on the offshore income and gains used to buy the art. The big problem was that any capital gain realised on a sale in the UK would [...]

On 16 February, I commented on the Government’s proposals to encourage non-doms to invest in the UK by relaxing the remittance rules which would otherwise impose a hefty tax charge on offshore money brought into the UK. Click here to view my earlier article. The proposals were originally published in the draft Finance Bill in [...]

HM Revenue & Customs has confirmed, that it intends, that the proposed capital gains tax charge on residential property (apparently of any value) owned by non resident ‘non natural persons’ will be imposed on disposals by non resident trusts as well as non resident companies in respect of all residential, non commercial property. The term [...]

The Government confirmed the introduction of a number of reforms to the non-dom tax regime – including the incentive to invest in UK businesses – and announced changes to the inheritance tax spouse exemption between spouses with different domiciles. The amount that a UK domiciled person can pass to his or her non-dom spouse or civil partner inheritance [...]

In recent years the Court of Public Opinion has often been quick to condemn the non-doms as tax dodgers who refuse to pay their way in the UK. While it is true that non-doms have the benefit of a tax regime more favourable than that available to ordinary Brits, to take that view is to [...]