Changes to the taxation of non-UK domiciliaries to be introduced retrospectively

Monday 31 July 2017

By Glenn Cassidy, Senior Tax Consultant, Equiom Solutions

The UK Government has announced that the proposed changes affecting the taxation of non-UK domiciliaries (which were removed from the Finance Bill 2017 as a result of the General Election) will be introduced as soon as possible after the UK Parliament’s summer recess, with retrospective effect. This means that the anticipated changes which we have been preparing for should become law in October/November this year when the second Finance Bill 2017 is passed, with effect from 6 April 2017.

The UK Government has issued new draft clauses, with what appears to be some minor technical changes. While history has taught us that we can never be certain about precisely what legislation may eventually be enacted, it would appear that any pre 6 April 2017 planning which has already been implemented will prove to have been worthwhile.

The key changes include:

  • Long-term UK residents becoming deemed domiciled in the UK for all tax purposes after having been resident in the UK in 15 of the previous 20 tax years
  • Individuals born in the UK with a UK domicile of origin becoming immediately domiciled in the UK for all tax purposes once they return to the UK – with a one-year period of grace for Inheritance Tax purposes
  • Protected settlement status for trusts which have been established by non-UK domiciled individuals
  • ‘Look-through’ provisions for Inheritance Tax purposes for the shareholder of offshore companies holding UK residential property
  • Rebasing of personally held foreign assets
  • The ability to cleanse mixed funds

When the draft Finance Bill is released later this year, the precise nature of the above changes should become even clearer.

If anyone has any queries in the meantime, they should speak to their relevant tax advisor.


If you have any questions or would like to discuss your situation with one of our tax team, please contact Glenn Cassidy.