21st July 2015
The clock is ticking for Britain’s non-doms and they should urgently consider reviewing their tax affairs, a financial advice firm has warned.
The alert comes after out after the Chancellor announced in his first Conservative-only Budget earlier this month that the permanent non-dom status is being scrapped from 2017.
Neil Walker, global head of tax at deVere deVere Group, says: “Approximately 116,000 UK residents currently enjoy the benefits of the UK’s non-dom tax status, which dates back to around the times of the Napoleonic wars.
“However, in a bid to demonstrate ‘we are all in this together’, this tax perk is now being abolished by George Osborne.
“Despite it not being scrapped until 2017, non-doms should urgently consider reviewing their tax affairs as the clock is ticking to put all the legitimate available measures in place in order to mitigate the effect of the new, controversial rules.
He says: “There are a raft of ways that the impact can be mitigated, but the options will invariably become narrower the closer we come to the cut-off point and, due to the complexities of each individuals’ status, the time to act is now. In addition, and importantly, it remains unclear if the changes being brought in will be retrospective.”
“The non-dom status remains for the first 15 years and, therefore, the UK should stay a low tax environment for most Britain-based expats if their affairs are correctly structured.”
Walker believes the new rules open the doors to so called “boomeranging”, which is the process of moving out of the UK for a few years and then returning in order to refresh your domicile status.
He adds: “Many of the budget changes were aimed specifically at UK residential property ownership. Many investors are likely to consider exploring the tax advantages of divesting this type of asset in favour of assets which do not attract the same level of charges, whether owned personally or through a trust or corporate vehicle.”