Domicile and Residence/Non-residence

Coming to the UK

Despite the recent changes to the taxation of “Nondoms”, the UK continues to have  beneficial tax rules for most people who come here to work, retire or just to live.

It is only after 7 years’ of UK residence that most of the new rules introduced in the Finance Act 2008 will apply to people who retain links with other countries.  Until that point is reached, they can generally avoid being taxed in the UK on overseas income and gains provided they are not brought into the UK.

However, there are a number of traps for the unwary, and the rules as to what is considered to have been brought into (“remitted to”) the UK have been tightened up in the 2008 Finance Act.

Expert advice will generally be required to ensure full advantage is taken of these rules.

Existing Nondoms and the £30,000 charge

If you have been resident in the UK for 7 years or more and have been claiming the "remittance" basis mentioned above, as from the 2008/09 tax year and subsequently, you will generally (subject to some exceptions) have to include all your overseas income on your Tax Return or pay the additional £30,000 “Nondom” tax charge.

• You may need to consider what the effect will be of including your overseas income on your Tax Return, and how to go about getting the necessary details ready for filing your Return under the new rules.

• You may need to consider whether or not to pay the £30,000 charge.

• You may need to consider whether there are ways of mitigating your tax liabilities under the new rules.

• If you have had offshore structures set up for you, these may no longer work as planned due to the Finance Act 2008, and you may need advice on possible restructuring or winding up. On the other hand , some planning opportunities may have arisen as a result of the transitional rules introduced in the 2008 Finance Act.