Non-doms and nil rate bands: Six ‘Emergency Budget’ predictions
By International Adviser, 19 Jun 15
Chris Groves and Sophie Dworetzsky from international law firm Withers outline six of their expectations for July’s Budget.
A new test for qualification for the remittance basis?
In 1985, the Law Commission considered replacing domicile with the concepts of ‘habitual residence’ or simply nationality, although neither found favour with the Commission.
For current tastes, habitual residence, which is used already in determining the jurisdiction of the English divorce courts, is likely to be too vague a concept and therefore prone to abuse.
Nationality, by contrast, has the benefit of being certain, but would have the effect of bringing into the scope of UK tax a large number of ex-pats who, for all other purposes, had severed their ties with the UK. The position of dual nationals would be difficult to deal with.
For inheritance tax, there is a concept of ‘deemed domicile’ which provides that non-doms who have been resident in the UK in 17 of the previous 20 tax years will be treated as domiciled in the UK for inheritance tax purposes.
This concept could be extended to income and gains tax and would ensure that long-term residents of the UK would not be able to claim the remittance basis. Such an amendment would have the benefit of simplicity and clarity and would address the perceived injustice of the inherited and long-term non-doms, but depending on where the line is drawn George Osborne may consider that he is in danger of killing the golden goose.
Tags: Non Doms | UK Adviser | Withers
