Autumn Statement: Confirmation of Non Dom Changes

November 23, 2016


The new UK Chancellor, Philip Hammond, gave his first Autumn Statement on 23 November 2016. As expected, the government confirmed that the reforms to the taxation of non-UK domiciled individuals and UK residential property will go ahead from 6 April 2017.


The key points are as follows:

  • From April 2017, non-domiciled individuals will be deemed UK-domiciled for tax purposes if they have been UK resident for 15 out of the past 20 years, or if they were born in the UK with a UK domicile of origin. As such, an individual who is “deemed domicile” in the UK will be subject to tax on their worldwide income and liable to UK inheritance tax on their global estate.
  • Draft legislation will be published on 5 December 2016 and therefore this leaves a very short time frame for impacted individuals to take action to mitigate the impact of the new rules.
  • As previously announced, the government has reiterated that non-domiciled individuals who have a non-resident trust established before they are deemed domiciled (under the 15/20 year rule) should not be taxed on income and gains arising outside the UK and retained in the trust. Therefore, settlors of non-resident trusts should urgently review existing structures before 5 December 2016.
  • Non-domiciled individuals who own UK residential property through an offshore structure should also seek urgent advice and restructure prior to April 2017 to reduce any inheritance tax exposure. Unfortunately, no relief from CGT or stamp duty for non-doms who “deenvelope” their UK property will be available.
  • The government will change the rules for the Business Investment Relief scheme from April 2017 to make it easier for non-domiciled individuals to bring money into the UK to invest in UK businesses. Non-domiciled individuals who may be affected by the proposed reforms should seek tax advice as soon as possible to ensure they have sufficient time to plan before the changes take effect in April 2017.

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