No Change on Non_UK Domicile Trusts

No Change on Non-UK Domicile Trusts

HM Revenue and Customs has announced that there will be no retrospection on the offshore trusts tax hit that non-domiciles will face as part of the current non-UK domicile foreign nationals reforms.  

The draft legislation proposed in the pre Budget speech in October 2007 and confirmed again in the Budget last week confirms that non-domiciles who have lived in the UK for seven years or more will be unable to claim a capital gains tax exemption on the disposal of UK assets in their offshore trust.

Our view

The legislation, that takes effect on 6 April 2008 also confirms that non-UK domiciles resident in the UK with either have to pay taxes in full on Worldwide income or pay a £30,000 tax charge and may then still be required to pay taxes if income is brought to the UK.  

This means that long terms foreign non-UK domiciles who live here for a long time as their permanent home with pay taxes much in the same way as any other UK resident and we see this as being fair and equitable provided they are afforded the same benefits.

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