New guidance published on changes to deemed domicile rules

02 February 2018

New deemed domicile rules came into force from 6 April 2017 and HMRC has now published new guidance to accompany and explain the new legislation.


As previously announced, from April 2017, non-domiciled individuals are deemed UK-domiciled for tax purposes if they have been UK resident for 15 of the past 20 years, or if they were born in the UK with a UK domicile of origin. Non-domiciled individuals who have a non-UK resident trust set up before they become deemed-domiciled in the UK will not be taxed on income and gains arising outside the UK and retained in the trust.

To close a loophole, from April 2017, inheritance tax will be charged on UK residential property when it is held indirectly by a non-domiciled individual through an offshore structure, such as a company or a trust.

The government will change the rules for the Business Investment Relief (BIR) scheme from April 2017 to make it easier for non-domiciled individuals who are taxed on the remittance basis to bring offshore money into the UK for the purpose of investing in UK businesses.

Find out about changes to the deemed domicile rules for Income Tax and Capital Gains Tax from 6 April 2017.