Please find below Lisa Spearman's latest blog on the Non-Doms issues, highlighted in our sister blog Tax Plus...

Following my blog of yesterday it now appears that the Chancellor has retreated on some of his proposals for the taxation of Non-Doms. Dave Hartnett, the Acting Chairman of HM Revenue and Customs has posted a letter on the Revenue website to clarify the Government’s intention in four areas where concerns have been raised.

According to the letter Hartnett wants….

“to make clear that the Government’s intention – which will be set out in legislation to be brought forward – has always been to ensure that:

• those using the remittance basis will not be required to make any additional disclosures about their income and gains arising abroad. So long as they declare their remittances to the UK and pay UK tax on them, they will not be required to disclose information on the source of the remittances;
• there will be no retrospection in the treatment of trusts and the tax changes will not apply to gains accrued or realised prior to the changes coming into effect;
• money brought into the UK to pay the £30,000 charge will not itself be taxable;
  
  and
  
  
• it will continue to be possible to bring art works into the UK for public display without incurring a charge to tax.
  
  In addition, we will continue to discuss with the US authorities how the £30,000 charge can become creditable against US tax.”
  
  
  

The full text of Hartnett’s letter can be found here.

This clarification is being interpreted as a retreat or a climb down by the Chancellor. However, a Treasury spokesman has been quoted as saying that the intentions have not changed it is just that the draft legislation has gone “slightly awry”. There are still a number of issues to be resolved and I expect we will have to wait until the Budget on 12 March to get further details.

Keep on watching this space.

• Email This
• Print
• Comments
• Trackbacks

Below is a blog which you might find of interest from my colleague and fellow partner Lisa Spearman who contributes to our sister blog Tax Plus blog.

After some considerable wait HM Revenue & Customs and customs have finally published the draft legislation covering changes to rules for taxing UK residents who are not domiciled in the UK.

These are more wide ranging than expected and will have a significant impact on not only Non Doms but also beneficiaries and settlors of offshore trusts whether or not they are Non Doms.

There is a significant amount of new legislation to be considered and it may be amended before (or after!) 5 April 2008. Some points that are proposed are.

• Non Doms who have been here for seven years (out of ten) will have to pay £30,000 a year to elect for the Remittance Basis.
• All Non Doms claiming the remittance basis will lose personal allowances and capital gains tax annual exemptions. Subject to a de minimis limit of £1,000 of overseas income / gains.
• Bringing non cash items to the UK such as works of art, cars, furniture, and jewellery will be treated as a remittance after 5 April 2008. If those items were purchased with overseas income or gains then the remittance could be taxable in the UK. If such items have already been brought into the UK and are used after 5 April 2008 the legislation as presently drafted, indicates that there will be a remittance which will be taxable.
• Beneficiaries of offshore trusts who receive capital payments may be taxable on capital gains arising in the trust that have arisen as far back as 17 March 1998 (yes ten years ago!) or gains made at some point in the future.
  
  

There is much more to consider but if you are Non Domiciled or have an interest in an offshore trust it would be sensible to contact your accountant now. There are only a few weeks before the new rules become effective.

• Email This
• Print
• Comments
• Trackbacks