Non-dom taxation reforms

08 February 2016

It was announced at Summer Budget 2015 that the Government intended to reform the taxation of UK resident individuals who are non-domiciled individuals (non-doms). Draft legislation covering the changes has been published for comment.

Legislation will be introduced in Finance Bill 2016 to deem certain persons, who would otherwise be non-domiciled in the UK as a matter of general law, to be domiciled here for the purposes of income and capital gains tax.

The two deeming provisions are given by Conditions A and B. Condition A applies to anyone born in the UK with a UK domicile of origin and whilst they are UK resident. Condition B applies to anyone who has been resident in the UK for at least 15 out of the previous 20 tax years.

The measure restricts access to the Remittance Basis so that anyone deemed UK domiciled by virtue of either Condition A or B cannot access the Remittance Basis.

In addition, the measure amends other aspects of income tax and capital gains tax law that offer advantages to non-doms but which do not directly rely on parts of the Remittance Basis to be amended.

The deadline for any comments on the draft legislation is 2 March 2016.