 February
2008
Residence and Domicile
Following the Pre-Budget Report announcement that
HMRC would be reviewing the rules on residence, HMRC
have issued some draft legislation which is expected
to take effect from 6 April 2008.
The tax treatment and conditions that need to be satisfied
for an individual to be non-resident and/or non-domiciled
are complex. The aim of the proposed legislation is
to ensure that individuals contribute in respect of
the foreign income and gains which they keep abroad
and on which they currently do not pay UK tax.
The proposed legislation includes:
- amending the residence rules, so that days of arrival
and departure to and from the UK will count towards
establishing residence
- individuals who are resident (but not domiciled
or not ordinarily resident) will generally have to
make a claim to be taxed under the favourable remittance
basis. There will be an exception to this rule where
the unremitted foreign income and gains are less
than £1000.
- individuals who are taxed on the remittance basis
will not be entitled to the personal allowance or
capital gains tax annual exemption, and
- individuals who are resident (but not domiciled
or ordinarily resident) for longer than seven
out of the past 10 years will only be able to use
the remittance basis of taxation on payment of an
annual charge of £30,000. This charge will
not apply where unremitted foreign income and gains
are less than £1,000.
HMRC confirm that the legislation is draft at present
and should be regarded as ‘work in progress’.
If you are potentially affected by these rules or
have any questions or concerns please do get in touch.
Internet Link:
HMRC
residence and domicile |
