We have been closely monitoring the government's proposals to:
- Treat non-UK domiciled individuals as UK domiciled for all tax purposes once they have been UK resident for 15 out of the previous 20 tax years.
- Bring all UK residential property, including certain loans to fund their purchase and assets used as security for those loans, within the scope of UK inheritance tax.
- Change the way offshore trusts are taxed.
Back in late April the government surprisingly withdrew the provisions that would introduce these rules, stating that there was insufficient time for Parliament to scrutinise the legislation that would introduce the radical changes before the snap election. The withdrawal of the provisions from the Finance Bill 2017 left clients and their advisors with a huge amount of uncertainty.
The government confirmed today that a new Finance Bill will be introduced soon after the summer recess which runs from 20 July until 5 September 2017. The Bill will introduce all the policies originally announced, and the rules will be backdated to 6 April 2017.
This announcement at least provides some certainty to clients and their advisors on the relevant planning steps they should take. However, it is disappointing that the government will not provide the final draft legislation until after the summer recess.
We will continue to monitor the situation and consult with our clients and their advisors to ensure that they are in the best possible situation given the current uncertainty. We will provide further information as it becomes available.
If you would like us to analyse your particular circumstances and advise on a tailored strategy, please contact Andrew Goldstone or your usual Mishcon de Reya LLP tax contact.