UK Resident Non-UK Domiciled Taxpayers – 5th April 2019 deadline is fast approaching, act now to take advantage

UK Resident Non-UK Domiciled Taxpayers
Mar
12
Posted 2019 by Chris Davies

The introduction of the ‘deemed domicile’ rules in April 2017 brought about a number of changes for the tax position of long-term UK residents who were previously considered UK resident but not-domiciled (UKRND’s). The change has meant that individuals’ resident in the UK for at least 15 out of the last 20 years would no longer have access to the remittance basis of taxation and would now be taxed on their worldwide income and gains.

Mixed Funds

Following the removal of this advantageous tax regime, HMRC have allowed a period of grace for UKRND’s to put their offshore tax affairs in order. If conditions are met, UKRND’s will have the opportunity to ‘cleanse’ offshore mixed funds. Once ‘clean’ capital is identified, this can be remitted to the UK tax-free without further tax implications.

Qualifying individuals only have until 5th April 2019 to ‘cleanse’ their offshore funds.

Rebasing – capital gains tax

A further relief will provide UKRND’s (who became deemed domicile on 6 April 2017) with the ability to rebase offshore assets to the April 2017 value. This will effectively exempt the earlier gain, which could become a new source of ‘clean capital’. The rebasing will apply automatically for qualifying individuals, although an election can be made to disapply the rebasing.

The tax rules surrounding UKRND’s are very complex. If you would like to discuss your position or require further advice, then please do not hesitate to contact Tom Annat (tannat@ross-brooke.co.uk) or Phil Kinzett-Evans (pkinzett-evans@ross-brooke.co.uk)