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There have been a number of changes to the rules applying to non-doms in recent years. Although the detail falls outside the scope of this planner, it is important to seek advice and clarity even if the changes are unlikely to affect you or you have already acted in anticipation of the changes. Menzies have a team who specialise in providing bespoke tax advice to foreign domiciliaries and answering offshore queries.
What is Deemed domicile?
Once you have been UK resident for 15 out of the previous 20 tax years, you will be deemed domiciled for tax purposes and will no longer be eligible to claim the remittance basis and will therefore revert to the arising basis.
In this case you will need to report your worldwide income and gains.
Furthermore, if you are a returning UK individual (UK born with a UK domicile of origin), following the changes in 2017-18 you will be considered deemed domiciled from 2017/18 if you are UK resident and it is only possible to break the deemed domicile status should you break UK residence for at least 5 complete tax years.
As with all matters regarding domicile, the rules are complex and you should seek specialist advise as a non-domicile on how you should be reporting your income and gains on your UK tax return, especially whilst you have the choice to be taxed on the remittance or arising basis, and the best option may not be the same each year as it will depend on the circumstances.
What are my reporting obligations as a non-UK domicile?
Your UK reporting obligations will depend on how long you have been UK resident and whether you have the option to choose to be taxed on the arising or remittance basis.
| Arising Basis | Remittance Basis |
| All UK sourced income and gains arsing in the tax year (6 April to 5 April) | All UK sourced income and gains arsing in the tax year (6 April to 5 April) |
| All overseas income and gains arising in the tax year (6 April to 5 April). In some circumstances this can be reported on a calendar year basis if the UK tax year information is not available | Any overseas income or gains remitted to the UK in the tax year (6 April to 5 April). Determining what counts as a UK remittance is a complex areas and specialist advice is often required. |
Depending on the length of time you have been UK resident you will have the choice as to how you are taxed in the UK (either using the arising or remittance basis) and therefore what you need to report on your UK tax return will differ accordingly.
What planning do I need to consider to preserve my tax position?
There have been a number of changes to the rules applying to non-doms in recent years. Although the detail falls outside the scope of this planner, it is important to seek advice and clarity even if the changes are unlikely to affect you or you have already acted in anticipation of the changes.
What changes have been applied to NON-UK Domiciles in recent years?
Foreign domiciliaries will be deemed UK domiciled for Income Tax, CGT and IHT purposes once they have been a UK tax resident for at least 15 out of the past 20 tax years.
Menzies have a team who specialise in providing bespoke tax advice to foreign domiciliaries and answering offshore queries. Get in contact with us via the contact form below if you want to discuss your non-UK domiciled status
Any individual who has a UK domicile of origin and was born in the UK and subsequently acquired a foreign domicile of choice, will immediately be treated as being UK domiciled for tax purposes if they return to be a tax resident in the UK at any point.
Get in contact with us via the contact form below if you want to discuss your non-UK domiciled status
Capital gains realised after 6 April 2017 will enjoy freedom from CGT to the extent that the gain accrued before that date. This is achieved by the application of a rebasing election which will apply on an asset-by-asset basis.
Get in contact with us via the contact form below if you want to discuss your non-UK domiciled status.
Legislative changes now provide that UK IHT will apply in relation to UK residential property in cases where it would previously have been protected. Examples include cases where the property is held through a non-UK corporate structure directly or as part of a structure headed by a trust. If you consider yourself a non-dom, ensure you have discussed with your tax advisor, and you have as much ammunition as possible, to defend your non-dom status in the event of a query from HMRC. Non-doms remain under the spotlight at HMRC, and specialist tax advice is critical.
Menzies have a team who specialise in providing bespoke tax advice to foreign domiciliaries and answering offshore queries.
Get in contact with us via the contact form below if you want to discuss your non-UK domiciled status
What counts as a UK remittance?
This is a complex area and professional advice should be sought if you are claiming the remittance basis and are reviewing whether you have made any UK remittances. Some examples of UK remittances include:
- Bringing in overseas money into the UK to spend;
- Settling a credit card debt with overseas money if the spend was in the UK – e.g. using the card in the UK to spend £250 in a UK store, if this is paid off using overseas money, this would be a UK remittance;
- Using overseas money to pay for a flight which begins or ends in the UK – this will be a UK remittance.
- There are so many examples of remittances this is just an example of some common remittance occasions