Proposed relaxations to the stringent UK non-dom rules
The Government confirmed in their Budget report in March that they would review the impact of the rules for individuals who are domiciled outside the UK (UK non-dom) and this initial review has now been completed. The consultation document released 17 June 2011 proposed a number of relaxations, which have been welcomed by professional advisors and UK non-doms alike.
The most welcomed change is the proposed relaxation of the stringent UK remittance basis rules in respect of UK business investment. Under the proposals UK non-doms will be able to bring offshore income and gains to the UK without creating a UK tax charge provided the remitted funds are used in new trading businesses, which includes the letting of commercial property.
The proposed changes follow fears that the current rules have restricted the level of investment made into UK business over recent years because UK resident non-doms have been unable to bring funds to the UK without incurring tax liabilities. It is hoped that this relaxation will result in some much needed investment into the UK economy.
Another important relaxation proposed is the intention for foreign currency gains and losses to be excluded from a UK tax charge for both UK doms and non-doms. This has been particularly harsh on non-doms, since there has been a concession for UK doms for many years.
There are also a couple of minor changes to the nomination of income for the remittance basis charge and an extension to one of the exemptions regarding assets brought to the UK.
The consultation period will end in September and the intention is that the new rules will be effective from 6 April 2012.
If you would like more information about the impact of these changes in your personal circumstances, please call Janet Pilborough-Skinner on +44 (0)1908 257207.