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    The remittance basis: how did we get here?



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    Rachel Reeves announces ending non-dom tax rules at Labour Party Conference in Liverpool

    In line with Labour’s previous stance, in her speech, Rachel Reeves stated that Labour would make various ‘hard choices’ including abolishing the non-dom tax status and putting that money into the NHS.

    Labour would also bring in “a modern scheme for people who are genuinely living in the UK for short periods to allow us to continue to attract top international talent.”

    Essential Reading: our insight


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    Chancellor Jeremy Hunt’s 2023 Spring Statement

    Once again, despite widespread speculation, Jeremy Hunt did not announce any major changes that would affect non-UK domiciliaries.  

    Essential Reading: our insight



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    Chancellor Jeremy Hunt’s 2022 Autumn Statement

    The Chancellor made no mention of non-UK domiciliaries or the remittance basis.  Of the proposals for fiscal legislative changes released by the HMRC, there were few that would have an impact on foreign domiciliaries.  

    Essential Reading: our insight


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    The tax status of politicians comes under scrutiny

    Rishi Sunak’s wife, Akshata Murty, had opted to claim the remittance basis. This means she did not pay UK tax on dividends received from her father’s Indian company Infosys (approx. £11.6m pa). On 8 April 2022, she announced that she would pay UK tax on her foreign income as well. 



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    HMRC release their review covering the non-UK domiciled population between 2008-9 and 2017-18 tax years

    HMRC’s review reports that the total number of taxpayers claiming ‘non-dom status’ has gone down from 137,000 in 2008-9 to 78,000 in 2018-19. The HMRC concludes that ‘this suggests the impact of the deemed domicile reforms has started to stabilise and so the number of non-doms has remained largely unchanged from the previous year’. 

    Essential Reading: our insight


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    The Chancellor, Rishi Sunak presents his Budget to Parliament

    Interestingly, no announcements were made about the remittance basis. This might be indicative of a general period of stability for UK resident non-domiciliaries and for the remittance basis, and a recognition of its importance in ensuring the UK remains an appealing location for international wealth creators and investors. 

    Essential Reading: our insight



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    Release of ‘Fair Tax Programme’ as part of the Labour Manifesto

    The ‘Fair Tax Programme’ proposes that the remittance basis should be done away with entirely, with a possible concession for temporary residents.

    Essential Reading: our insight


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    Labour tax policy in the 2019 General Election

    Labour looks to apply ‘a fair taxation system’ to ensure that public services can be funded, and that tax evasion is avoided. In relation to non-UK domiciliaries, the Shadow Chancellor, John McDonnell, announces that Labour would look to a potential abolishment of ‘non-dom status’ in its first Budget.

    Essential Reading: our insight



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    The UK Government releases a draft Finance Bill 2018-19

    The Bill re-introduces some of the complex anti-avoidance provisions regarding trusts that were dropped from the original Finance Bill 2017. The Bill’s provisions apply retroactively from 6 April 2017. 

    Essential Reading: our insight


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    HMRC releases guidance covering various aspects of the Finance (No 2) Act 2017

    The Finance Act 2017 introduces new rules in relation to settlors of offshore trusts who have become deemed domiciled under the new 15/20 year rule. The HMRC Guidance leaves several questions unanswered. Dominic Lawrance discusses how to prevent the ‘tainting’ of such offshore trusts such that they retain their ‘protected settlement’ status.

    Essential Reading: our insight



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    Finance (no 2) Act 2017

    Despite only receiving Royal Assent in November 2017, the Finance (No 2) Act 2017 came into effect from 6 April 2017.  It introduced wide-ranging changes to: the tax treatment of non-UK domiciliaries; the remittance basis; the taxation of non-UK trusts; and the inheritance tax treatment of loans and structures related to residential property.

    Essential Reading:



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    UK Government publishes excerpts of the Finance Bill 2017

    The Government confirms that it will not water down or cut back ‘protections’ for non-resident trusts and entities. Introduction of new rules affecting the treatment of trusts with UK resident settlors/beneficiaries who are foreign domiciled but not deemed domiciled.

    Essential Reading: our insights


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    The UK votes to leave the EU

    There is a lack of clarity in relation to the impact of Brexit on non-UK domiciliaries. They face the prospect of becoming deemed domiciled in the UK for all tax purposes from April 2017 onwards. Government proposals include a new rule which make interests in non-UK entities that own UK residential property “transparent” for IHT purposes.

    Essential Reading: our insight
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