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Changing landscape for non-doms

10 Aug

Changing landscape for non-doms

From April 2017, new rules are set to be introduced that will significantly change the circumstances under which non domiciled (non-dom) status can be claimed by those that are UK tax resident. The changes will affect those who have lived in the UK for the last 15 years or more and who seek to claim non-dom status and will see an end to the permanency of non-dom status.

The changes are likely to mean that anyone who has lived in the UK for more than 15 of the last 20 years will lose their non-dom status and will be considered UK-domiciled for tax purposes. The changes should not affect those that come to work in UK companies on short to medium term contracts.

Currently, non-doms that wish to retain access to the remittance basis of taxation must pay an additional sum in addition to the tax on any income or gains remitted. This sum is known as the Remittance Basis Charge (RBC) and is a fixed annual charge of between £30,000 and £90,000. The reforms will mean that the £90,000 remittance basis charge payable by those who have been resident for 17 out of 20 years, will become redundant whilst the £30,000 and £60,000 remittance basis charges will remain unchanged.

Plans have also been announced, that will insure that non-doms that own residential property in the UK will be subject to inheritance tax whether the property is held directly or indirectly through a structure such as an offshore company or a trust. In addition, from April 2017, individuals who are born in the UK, to UK domiciled parents, will no longer be able to claim non-domiciled status whilst they are residents in the UK. It remains to be seen if the new chancellor will announce any changes to these plans as part of the Autumn Statement later this year.