18th March 2016
It is a relief that the Chancellor’s 2016 Budget yesterday devoted little time to non dom’s, especially after the number of recent changes.
The 2016 Budget basically confirmed the main changes that were announced in the 2015 Summer Budget and confirmed these will be introduced in the 2017 Finance Bill and become effective from 6 April 2017- the deemed domicile status for residents of the UK of 15 years and in UK inheritance tax due on UK residential property held by offshore structures.
The good news from the Budget was the that deemed dom's from 6 April 2017 will have the opportunity to “re base” their foreign assets from that date for UK tax purposes. The increase in value of the assets from 6 April 2017 therefore will be subject to UK tax when sold.
This is being seen as a fairly generous approach but does indeed follow the Governments approach on ATED “annual tax on enveloped dwellings” and the non resident capital gains tax on UK residential property.
It is not clear how the Government intends to tax any pre 6 April 2017 gains but one is assuming these will be subject to the remittance basis of taxation.
This proposal avoids the need for non dom’s to plan to sell their assets pre 6 April 2017 and re purchase them after April 2017.
If you need any further advice on non dom tax, please contact Julia Hoyle.