Non-UK Domiciliaries

The new rules for persons who are resident but non-domiciled in the UK are as follows:

- Annual tax charge of £30,000 to apply if individuals who are resident in the UK for 7 out of the previous 9 years wish to continue to use the remittance basis for overseas income and gains.

- The charge will only apply to adults and not to children.

- Those who have less than £2,000 of unremitted foreign income and gains in the relevant tax year do not have to pay the charge.

- Individuals can opt to be taxed on the remittance basis for one year but not the next year depending upon their foreign income and gains.

- Days of arrival and departure from the UK may be counted as days spent in the UK as part of the “residence” test. Therefore, advance planning is critical in ensuring that unnecessary tax exposure is avoided.

Implications for private clients include:

- Many individuals will have to pay the annual £30,000 fee from 2008/2009 onwards as they will have completed their 7 years residence.

- In many cases the foreign income will not be significant enough to warrant such a fee and these individuals will have to pay UK tax on worldwide income and gains on an arising basis.

- Very wealthy clients might prefer to pay the annual fee rather than report their worldwide income.

- Non-domiciled couples may have to pay £30,000 each (£60,000 in total) per year to retain the benefits of the remittance basis of taxation. Therefore, planning may be required to transfer foreign assets to one spouse so only one lot of fees is payable.

Our specialist advice can help non- UK domicilliaries improve their UK tax position. Our range of services for non-domicilliaries includes :

  • Establishment of residence and domicile status with the Inland Revenue
  • Income and Capital Gains Tax planning
  • Estate Planning
  • Assistance with tax investigations e.g on bank accounts held offshore
  • International business structuring
  • Planning before arrival in the UK
  • Tax planning before departing from the UK
  • Trusts and related issues
  • Tax-efficient Yacht purchasing and chartering