The Chancellor has backed down to an extent on the changes to the taxation of non-domiciliaries.
He has confirmed the rebasing provision for overseas trusts. This is now elective. There is also a suggestion that the notification requirements will be relaxed for trusts in many cases.
There will be no capital gains tax charge on non-domiciled settlors for gains realised within offshore trusts. This applies regardless of whether the gains are UK or overseas based.
The only capital gains tax charge in relation to overseas trusts is a charge on the beneficiaries when gains are distributed. However, this may be on a remittance basis, even if the assets are UK situs, and no tax may be payable on gains arising prior to 6 April 2008.
The Chancellor has also taken steps to try and assuage concerns of US citizens that the £30,000 charge will not be off-settable against US federal tax.
The changes may make it more desirable to keep offshore structures in place and even set up offshore structures going forward.
