“However, pending any further clarification, long term non-doms who are anticipating being taxed on a worldwide basis should not remit foreign income or gains from the current tax year, just in case the delay in implementation provides them with another year under the remittance basis.
“Likewise, decisions regarding the sale of assets which would have benefitted from rebasing in April 2017 should be put on hold for now,” he told International Adviser.
Groves said it is “unlikely” the reforms, which will see non-doms who have resided in the UK for more than 15 of the past 20 tax years automatically deemed as UK-domiciled, will be “scrapped entirely”.
“Any decision on this will inevitably be dependent on the outcome of the election, but it is unlikely that there will be substantive changes to the rules, whatever the make-up of the next government may be,” he added.
Brexit impact
Martin Rimmer, head of tax for south-east Asia at The Fry Group in Singapore, home to around 50,000 British expats who predominantly work in finance and legal services, said it could become “politically expedient to actually strike off some of the more controversial measures” announced before the Brexit vote.
The new rules were expected to affect thousands of British expats, who face significant tax bills if they returned to the UK.
Under the new system, non-dom status for Britons who return to the UK but claim to have a permanent home abroad was also set to be removed.
The freeze will also apply to proposals to close the IHT loopholes used by non-UK domiciles to purchase property in the UK via offshore shell companies, which HMRC is still consulting on.
There were also concerns that the proposals would deter foreign wealthy individuals from coming to the UK, particularly following Britain’s decision to leave the European Union.
“For our clients, who have been preparing for the changed to come into force on 6th April 2017, this is disquieting. However, we are telling them to expect enactment of the laws to take place later in the year and that the planning undertaken remains valid,” Rimmer told IA.
