In one section the consultation paper makes clear that non-doms who will become UK residents after 6 April next year will be allowed to rebase their non-UK assets on that date, meaning that any growth in value of those assets prior to April 2017 can be realised in the future without a charge to UK tax.
“The government agrees that it would be punitive to require long-term resident non-doms to pay CGT (capital gains tax) on gains that have accrued on foreign assets held while the individual was a non-dom.
“Individuals will be able, if they wish, to rebase overseas assets to the market value of the asset at 5 April 2017 with the result that any gain which accrued before April 2017 will not be charged to CGT in the UK,” it said.
Trust benefits
Davies noted that the paper also made clear that a proposed “trust benefits charge”, which sought to apply a tax to trust distributions without reference to the source of those distributions, has been dropped.
“Instead the government intends to modify the current rules on how trust income and gains are taxed in order to bring them into line with the introduction of the extended deemed domicile principle,” he noted
“The good news for non-doms is that it should remain possible to structure offshore trusts to allow access to clean capital and capital gains at lower tax rates; however, it is likely that a consequence of this change in approach will be the introduction of even more complex anti avoidance legislation.”
