Non domiciled individuals: what are the options

Following new tax legislation that received Royal Assent in July (but effective 6 April 2008), long term UK residents with a non domiciled status must decide whether to be taxed on worldwide income and gains or pay a £30,000 charge and use the remittance basis. Determining whether the charge even applies can be quite complex.

If you are liable to pay the £30,000 charge, you will need to decide whether you should pay the levy and be taxed on the remittance basis or not pay the charge and be taxed on your worldwide income and gains on the arising basis.

PricewaterhouseCoopers LLP has devised a flowchart for both adults and minors to help determine how the legislation affects individuals in a range of scenarios. For those choosing between the remittances and arising basis, a separate chart is provided to help guide which option will be the most efficient.  

For some individuals the choice will be straight forward. Those with smaller offshore income or gains are likely to conclude that financially it is not worth paying the £30,000 to access the remittance basis. In contrast, individuals whose offshore income and gains are substantial and who make few taxable remittances are likely to view the £30,000 as cost effective. For others the decision will be more finely balanced and perhaps non-financial factors, such as having to disclose world wide income and gains on the tax return will influence the decision. 

If you would like further advice in relation to the issues outlined above, please call your usual PwC adviser or those listed above.

• Remittance versus arising basis calculator (PDF)
• Non domiciled individuals – remittance or arising basis (minors aged under 18) (PDF)
• Non domiciled individuals – remittance or arising basis (adults aged over 18) - (PDF)

Contact details
Email: Lee Blackshaw
Tel: +44 (0)161 247 4013