17 July 2015

Wragge & Co: UK Summer Budget 2015 - new rules for non-doms

The UK Chancellor made his Summer Budget speech on 8 May 2015, the first of the new Conservative Government. 

Included in this were a number of measures of great significance to non-UK domiciled individuals, not least to those who own residential property in the UK or may acquire such property in the future. 

These measures include the following: 
  • Non-UK domiciled individuals with a domicile of origin outside the UK will be deemed to be domiciled in the UK for all tax purposes - income tax, capital gains tax (CGT) and inheritance tax (IHT) - after they have been resident for 15 out of the last 20 tax years;
  • Individuals with a UK domicile of origin will be unable to take advantage of a subsequently acquired foreign domicile at any time when they are UK resident, irrespective of the number of years they spend here; 
  • Non-UK domiciled individuals will no longer be able to shelter UK residential property from IHT by holding it through an offshore company or other offshore vehicle. This will apply to property held through companies owned by both individuals and trustees. 
In this update, Wragge Lawrence Graham & Co look at the new measures, which are due to take effect from 6 April 2017 following consultations to be published later in the summer, and consider the potential implications for non-UK domiciliaries, both resident and otherwise.

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