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Overview

Changes to the taxation of non-UK domiciled individuals and non-UK resident trusts were introduced and effective from April 2017.

What are the changes?

  • Inheritance Tax (IHT) will be charged on UK residential property held through offshore companies. Valuations will take debts and the company’s net value into account.
  • The remittance basis of taxation will cease to be available to individuals who have been UK tax resident in 15 of the previous 20 UK tax years and have so become "deemed-domiciled": this will impact on individuals from the start of their sixteenth tax year in the UK.
  • "Deemed-domiciled" status for IHT purposes will cease after four consecutive tax years of non-UK residence, effectively keeping the current 'IHT shadow’ treatment. However, individuals will still need to remain non-UK resident for six complete UK tax years to re-start the clock in the event they decide to return to the UK.
  • Individuals who became “deemed-domiciled” for income tax and CGT purposes on 6 April 2017 will be able to re-base their non-UK assets' values at that date if they have previously paid the remittance basis charge at least once since 2008. They will also enjoy the ability to make tax-free remittances of any gains realised on disposals of such non-UK assets after 5 April 2017 to the extent such gains were attributable to the pre-April 2017 period.
  • There will be an ‘amnesty’ on segregating mixed funds during the 2017/18 and 2018/19 tax years, allowing more tax-efficient remittances for remittance basis users in the future.
  • Pre-“deemed-domiciled” trusts will be afforded “excluded property” status for IHT. In addition, their settlors will benefit from protections from attribution rules for CGT and Income Tax, provided conditions are met: these trusts will therefore be useful ‘freezers’ for settlors and families who do not intend to access trust funds whilst resident in the UK.
Meet the team
John Barnett

John Barnett Partner

  • Head of Private Client Services
  • Head of Partnerships
  • Tax
Beatrice Puoti

Beatrice Puoti Partner

  • Head of Private Wealth
  • Private Client Services
  • International Tax and Trust
Suzanna Harvey

Suzanna Harvey Partner

  • Private Client Services
  • International Tax
  • International Trusts

How can Burges Salmon help?

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Burges Salmon has one of the largest teams of lawyers dealing with non-dom clients anywhere in the UK and the quality of our private wealth services is nationally recognised. Our private wealth lawyers were named “Legal Team of the Year - Large Firm” at the STEP Private Client Awards 2015/16 and 2017/18 and sector head Beatrice Puoti "Lawyer of the Year" at the Citywealth Magic Circle Awards 2015.

Please contact John Barnett, Beatrice Puoti or Suzanna Harvey for further assistance.

Key contact

John Barnett

John Barnett Partner

  • Head of Private Client Services
  • Head of Partnerships
  • Tax

What others say...

Exceptional team capable of handling complex and sensitive matters. Particularly strong on offshore and cross-border work, providing traditional private client services to high net worth individuals, private banks and trustees.

Chambers UK 2016