Are you non-domiciled and looking to manage your UK cash-flow, income, assets and investments? If you are, there are specific issues you’ll need to address in relation to your planning and compliance.
In this video Elizabeth Henson explains some of the complex rules surrounding non-domiciled individuals in the UK and some key tax issues which may affect those looking to invest their cash here.
Investment remittance relief has been brought in to help with business investment – if you’re looking to invest in a business, this is worth taking into account as it provides a route for investing in the UK without this being treated as a taxable remittance.
If you will become deemed domiciled in the UK from 6 April 2013 (broadly been UK resident for 17 out of the last 20 tax years) you will then be liable to UK inheritance tax (IHT) on your worldwide assets. There may be IHT planning that can be done prior to becoming deemed UK domiciled to mitigate exposure to UK IHT on overseas assets. But you’ll need to speak to us as soon as possible if you’re in this position.
There have been recently announced changes in respect of high-value (ie over £2m) UK residential property held by ‘non-natural persons’ (broadly companies and partnerships with corporate partners). These changes have brought in a new annual charge from 1 April 2013 as well as capital gains tax (CGT) from 6 April 2013.
See the section on "Preserving your assets" for more detail regarding the impacts, however we can assist with reviewing existing property holdings or advise on the best structure to use to purchase new UK residential property given your non-domicile status."
As a non-UK domiciled individual the use of offshore trusts remains an effective method for ownership of assets. But the use of trusts is a complex area and we would advise professional advice is taken before such structures are considered.
As part of your remittance basis planning you may wish to think about segregating your funds overseas to ensure your remittances are clean capital and not income/gains (which would be taxable upon being remitted)
Non-UK domiciled individuals are still subject to UK inheritance tax on their UK situs assets. You should ensure you have a will in place to govern your UK and overseas assets and to ensure your estate planning is implemented.