Latest News

Nondoms back in the spotlight

Measures announced in the draft Finance Bill 2012 have again highlighted the need for specialist expertise in dealing with the tax affairs of nondoms, says Midgley Snelling.

The draft legislation, published on 6 December, included confirmation that as from 2012 13, the remittance basis charge will rise from £30,000 to £50,000 once an individual has been resident in the UK for at least 12 of the previous 14 years. The draft Bill also gave details of a new investment relief, which comes into effect on 6 April
2012, designed to allow nondoms to remit funds to the UK to make investments into UK businesses without triggering a tax charge.

A number of conditions apply to these investments both before and after they have been made for the relief to apply. These include the exclusion of partnerships or sole traders as target investments and a 45day limit on the expatriation of the proceeds from the disposal of the investments to avoid them being regarded as taxable remittances. The introduction of the new Statutory Residence Test has surprisingly been put back one year and will now come into effect on 6 April 2013.

The UK tax rules that apply to nondoms have never been simple and the latest changes have not made them any clearer. Whilst the introduction of the Statutory Residence Test has been deferred for a year, it is unlikely to
change substantially from the proposals in HMRC’s consultation document so firms with nonresident or nondomiciled clients should use the breathing space to review the position of those clients to avoid unpleasant shocks.

This is a longstanding specialism at Midgley Snelling and Robin Sewell and Peter Bond welcome enquiries from fellow MGI firms on any aspect of nondom taxation or planning where our experience may be of value. We
can also offer access to offshore trust and corporate management services through our affiliated Kingston Management Group, which has offices in several jurisdictions.