On 6 December 2011 draft legislation for the Finance Bill 2012 was published containing a number of measures of interest for non-domiciled private clients and those visiting, coming to or leaving the UK :-
1. Non-UK domiciled individuals
1.1 Business Investment
The Government is introducing measures to encourage business investment.
Resident non-domiciliaries will from 6 April 2012 be able to remit their overseas income and capital gains to invest in UK trading companies without an immediate charge to UK income or capital gains tax on the remittance of the funds to the UK. These rules will permit funds to be brought into the UK to invest in shares in, or loans to, UK trading companies (including companies engaged in the development or letting of commercial property). Eligible companies will be those not listed on a recognised stock exchange. It appears that investment in an AIM listed company will qualify so long as it meets the trading conditions. There will be no upper or lower limit on the level of investment, to maximise the number of people using the relief.
The legislation is complex and includes a number of anti-avoidance provisions to ensure that the relief is not abused.
1.2 Remittance basis charge
For individuals who have been tax resident in the UK for 12 out of the last 14 years the remittance basis charge to enable them to exempt their overseas income and capital gains from UK tax so long as they do not remit will increase from £30,000 to £50,000 with effect from 6 April 2012.
1.3 Simplification of the nominated income rules
The nominated income rules will be amended to allow non-domiciliaries to remit up to £10 of overseas income or capital gains which they have nominated for the purposes of the remittance basis charge without being taxed on that remittance, and without being subject to onerous identification rules.
1.4 Exemption from remittance
Where a resident non-domiciliary remits overseas income to pay the remittance basis charge (ordinarily not taxable), but where HM Revenue & Customs refund the money (which currently gives rise to a taxable remittance) a new exemption will apply.
2. Statutory residence test
The Government has decided to allow further time to finalise the detail of the proposed new statutory residence test. It has stated, however, that it is "committed to the form of the statutory residence test" set out in last summer's consultation paper. It is now expected that legislation will be contained in the Finance Bill 2013 and take effect from 6 April 2013.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
