A series of changes to the taxation of individuals who resident in the UK but domiciled outside the UK, so called resident non-doms (RNDs) which came into force from 6 April 2017, which broadly include the following provisions:
- RNDs who have been UK resident for 15 of the past 20 tax years before 6 April 2017 will be treated as deemed domiciled in the UK for all UK tax purposes from 6 April 2017.
Two transitional reliefs are available to RNDs who fall within this category:
- The ability to rebase assets held at 6 April 2017 date and therefore wipe out uncrystallised gains (but not any of the income or gains which funded the acquisition of a bought asset).
- For RNDs who have been a remittance basis user in at least one years since 2008/9, there is a two year window to 5 April 2019 to 'cleanse' (separate out) mixed funds in bank accounts.
- RNDs who were born in the UK with a UK domicile of origin and who become UK resident since 6 April 2017 (formerly domiciled residents or FDRs) will automatically become deemed domiciled in the UK for all tax purposes straightaway, except in relation to inheritance tax (IHT) where there is a two year deferral before they also become deemed domiciled in the UK for IHT purposes too. In addition to automatic deemed domiciled status, FDRs will not have access to the same reliefs as other deemed domiciled RNDs as noted above.
- In addition, from 6 April 2017 all UK residential property interests, whether held directly or indirectly (via offshore companies), by non dom individuals and trustees of non-resident trusts set up by non doms, any lending used to acquire such an interest or the collateral for such lending, are subject to IHT.
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.
