Commenting on the changes to the non-dom tax regime announced in today’s budget, Mike Walker, International Private Client tax partner, at KPMG in the UK, commented:
“Buried in the detail of today’s budget was a confirmation that non-doms will be able to rebase their offshore assets to their market value at 6 April 2017. This means that those who become ‘deemed domiciled’ (and thus subject to UK tax on their worldwide income and capital gains) will only be subject to UK tax on gains that accrue on their worldwide assets after this date.
“The Budget 2016 documents also reiterate the Summer Budget 2015 statement that where a non-dom has established a non-UK resident trust before becoming deemed domiciled, income and gains in the trust will not be subject to UK tax unless they are remitted to the UK.
“Whilst it’s helpful that there’s been confirmation on these points, some uncertainty remains. For example, the precise shape of the how the new deemed domicile rules will operate still remains unclear, particularly for non-UK trusts established by affected individuals. Clarity on this latter aspect is essential to give a clear indication of the options available to non-doms in advance of their being impacted by the new rules.
“Plus there are proposals already announced to extend the scope of inheritance tax to non doms with indirect holdings of UK residential property (e.g. owned through non-UK companies).
“Notwithstanding the fact that some details are still to come, there are a number of changes on the horizon. Non-doms who invest time now to take stock of their assets and the structures through which they are held so they have a clear understanding of their current position will be able to act more quickly once further details of the new rules are announced.”
Follow us on twitter: @kpmguk #Budget2016
For further information please contact:
Roger Newby, FTI Consulting
Mobile: 07894 093 892
KPMG Press office Tel: +44 (0) 207 694 8773
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.