The company said “speculation has heightened” recently that there would be changes to the rules, after HM Revenue & Customs issued a consultation paper centred on restricting non-resident’s entitlement to the personal allowance.
If new rules were to come into force, it could cause a 10 year reduction – from the current 17 years to seven years – in the length of time a foreign national can reside in the UK before they would be subject to pay UK inheritance tax (IHT).
Old Mutual Wealth said anyone living in the UK who is non-UK domiciled should take pre-cautionary steps, such as investing in an excluded property trust or gifting property, to ensure their assets are not targeted.
The company has advised that non-domiciled residents in the UK should consider placing their assets inside an offshore bond to make managing their assets simpler and more efficient, as well as offering relief on income and capital gains tax.
Financial planning expert at Old Mutual Wealth, Rachael Griffin, said: “The number of wealthy individuals who spend a considerable amount of time in this country is increasing.
“These individuals may be unaware of the deemed domicile rules, and the speculation around the potential changes may create concern and uncertainty.”
She added: “It’s possible to see that the tax rules are closing in and tightening. I’m not going to say 100% that the changes to the domicile rule will go ahead, but it’s quite an easy target.”
