The Countdown to 2017 led us to 6 April 2017, the date the UK government proposed to introduce new legislation changing the way non-domiciled individuals are taxed once they have been long-term resident in the UK. Other important changes affected non-doms owning UK residential property through offshore structures, and the taxation of offshore trusts. The Finance Bill was drafted and legislation proposed to enact these changes on 6 April 2017 as stated.
We worked hard with clients and their advisors to ensure that the 6 April 2017 planning deadline was met, and that their affairs were in order. However, in a very surprising and unprecedented move, the Government has just announced it is dropping those sections of the Finance Bill that were going to introduce these changes. Whilst it is likely that the dropped proposals will return after the UK general election on 8 June, for the time being the UK government is not introducing changes to:
- Treat non-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; or
- Change the way they tax offshore trusts.
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.