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With only four months to go until April 2017 when the new UK taxation regime for non-UK domiciled individuals (‘non-doms’) takes effect, the draft legislation released in the UK Finance Bill 2017 on 5 December offers some welcome clarification of the new rules.
Non-UK domiciled individuals who are long-term UK residents will become deemed UK domiciled for all UK taxes, aligning the income tax and capital gains tax treatment with the current deemed domicile rules for inheritance tax.
The UK Government has settled on a new regime that will give a “protected” status to offshore trusts made before and not added to after, an individual becomes deemed domiciled, with settlors being charged to UK income tax and capital gains tax on benefits and capital payments received.
From 6 April 2017 UK residential property owned through certain non-UK structures will be brought within the charge to UK inheritance tax (IHT) regardless of the residence and domicile status of the ultimate owner.
All non-UK domiciled UK resident individuals (except ‘returning non-doms’) have a one–off opportunity to re-organise offshore mixed funds into their constituent parts.