Domicile status and remittance

Domicile status and remittance basis

Significant changes to the tax regime for non-UK domiciliaries (non-doms) means that it is imperative that UK resident individuals who are currently claiming non-dom status take advice.

If you were born in the UK, have a UK domicile of origin and are living in the UK, you will not be able claim non-UK domicile status for UK tax purposes, even if you have acquired a foreign domicile under general law. If you are non-UK domiciled and come to live in the UK, you will be able to claim non-dom status, and utilise the remittance basis of taxation, for a limited period of time only.

As long as you remain eligible for the remittance basis, your foreign income and gains are only taxable in the UK to the extent they are brought (remitted) into the UK. But, if you are resident in the UK for at least seven of the last nine tax years, there will continue to be an annual remittance basis charge and you will also lose the income tax personal allowance and capital gains tax exemption, which UK domiciled individuals benefit from. When using the remittance basis, ensure you are clear on exactly what you are remitting to the UK, to avoid being taxed unnecessarily.

The rules and administration surrounding the taxation of non-doms are complex, but there are plenty of planning opportunities available. RSM can advise on your domicile status and how this impacts your tax position. We can also assist you with identifying and quantifying remittances, to ensure you know what tax is applicable when you bring funds to the UK, and help you consider tax efficient planning options.

If you would like more information download our sweeter tax planning ideas or contact Gary Heynes.