Budget 2015- Taxation of UK resident non-domicilaries
The Chancellor announced a significant change for long term UK resident non domiciled individuals (“non-doms”) from 6 April 2017, effectively removing their ability to choose the remittance basis of taxation after they have been resident for 15 out of the last 20 tax years.
MHA MacIntyre Hudson comment
Mr Osborne has continued the trend started by Alistair Darling of attempting to trim the tax benefits being a non-dom resident in the UK while trying not to scare them away.
At first sight, the loss of the remittance basis charge from long term resident non-doms will make the Treasury a bit poorer, but the loss of the remittance basis for these longer term residents will apparently yield £1.5bn in extra tax per annum as they start to pay tax on their worldwide income and gains. That figure may well be a hopeful estimate, as non-doms claiming the remittance basis do not currently have to tell HMRC anything about their non UK income and gains.
Mr Osborne has probably struck the right balance, extracting a little more from the non-dom community while largely maintaining the attractiveness of the UK to them, certainly for those non-doms who are resident for the short to medium term. The new rule closely mirrors the existing rules for non-doms for Inheritance Tax, with deemed UK domicile occurring after 17 tax years of residence.
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