Non-dom changes: UK resident with a foreign domicile of origin

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Summary: Significant tax changes come into force in April 2017 for UK resident non-doms. If you have been in the UK for 15 years or more you will lose substantial tax advantages. Although some beneficial tax treatment will remain, it is safe to assume your tax will likely increase. Here we provide a guide to the proposals so you can plan ahead.

UK tax resident for fewer than 15 tax years (short-term resident)

A non-UK domiciled individual who has been UK tax resident in fewer than 15 of the previous 20 tax years can claim the remittance basis of taxation.

  • If he makes a valid claim for the remittance basis:
    • he will be subject to tax on his (i) UK income; and (ii) gains realised on UK assets, as they arise
    • he will only be subject to tax on his foreign income if it is remitted to the UK
    • he will only be subject to tax on his foreign gains if the sale proceeds are remitted to the UK
    • in relation to an offshore trust set up by him:
      • he will be subject to tax on UK income of the trust on an arising basis
      • he will only be subject to tax on:
        • foreign income of the trust if it is remitted to the UK
        • gains of the trust if he receives a benefit from the trust in the UK
  • If he does not claim the remittance basis he will be subject to tax on his worldwide income and gains, and the income of any trust set up by him
  • Whether or not he claims the remittance basis:
    • he will only be subject to inheritance tax on his directly held UK assets, and UK residential property (held directly or indirectly)
    • non-UK assets held in an offshore trust set up by the individual will not be subject to inheritance tax

Post April 2017 rules:

Post april 2017 rules

Read more amount long-term residents and tax position once deemed domiciled.

Download our guide >

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