We last wrote about non-doms earlier this year, and since then we have had several versions of new draft legislation culminating in the Finance Bill published last March. To clear the decks for electioneering, the government temporarily abandoned the most controversial of its proposals – including all of those relating to non-doms – but vowed to bring them back post the election.
The government announced some weeks ago that they intended to retain the 5 April 2017 date for the new legislation to come into effect. They published the new 674-page Finance Bill on 8 September. As the Chancellor has announced that he will introduce a Budget on 22 November, we expect the Finance Act to become law well before then. The Public Bill Committee must finish its deliberations by 21 October, which suggests that the aim is to pass the remaining stages in the House of Commons by the end of October. Accordingly it is unlikely there will be many, if any, changes to the proposed legislation.
The main changes from the previous draft appear to be:
- there are changes to clarify the transitional rules on trusts,
- the facility for non-doms who used the remittance basis to “cleanse” their overseas bank accounts before 6 April 2019 has been extended to cover pre 5 April 2008 income and gains (which most people thought was the proposal in any event),
- there is a new IHT transitional relief for transactions between 6 April 2017 and the date of Royal Assent – this effectively acknowledges that the due date for payment of the IHT cannot be before the date of Royal Assent, and
- there is a similar relief for the IHT change on shares in overseas companies holding UK residential property, and also some minor amendments to the wording of the rules.
Clearly the taxation of non-doms has gone through significant changes in recent years. We have spoken to many of our clients who have been affected by those changes and done what we can to reorganise their affairs to ensure that they have been able to benefit where possible – or at least that those changes have not been as damaging as they could have been. However, some of you reading this that may be affected may not yet have discussed your affairs with your advisor and we would urge you to do so now.
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