£50,000 charge for non UK domiciled

For 4 years, individuals not domiciled in the UK have experienced continuous shifts in their tax circumstances. The recent budget introduces new costs and potential benefits along with the promise of no more changes for the rest of this parliament.

Currently non-domiciled individuals resident in the UK for seven out nine of the previous tax years have to choose whether to pay the £30,000 remittance basis charge or be taxed on worldwide income. From 6 April 2012 that charge will increase to £50,000 once an individual has been resident for 12 years.

The Chancellor, George Osborne, has promised to consult on developing a statutory definition of residence. Currently, meeting the 90 night rule in the UK isn’t always sufficient to prove non-residence. A statutory definition may help bring certainty for those looking to break UK residency, but may restrict the ability to have ongoing economic and personal ties.

Osborne also announced that proposals would be put forward to allow non-domiciled individuals to bring off shore income and gains into the UK for the purpose of investing in UK businesses free of any tax charge. This could be very beneficial but is likely to come with strings attached!

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