HMRC guidance on new non-don rules

Last month, the HMRC published guidance on the new tax rules for individuals who are non-UK domiciled and offshore trusts, which take effect from 6th April 2017. Non-UK domiciled individuals should be aware of these changes, and ensure they are in like with the new regulations in order to avoid penalties.

 

Within the HMRC publications there are a number of changes, which include:

Cleansing of mixed funds

The summary lists rules that will allow a window up until the 5th April 2019 to enable division of income, capital gains and clean capital elements of existing non-UK bank accounts into separate accounts.  If managed correctly, this would enable any non-dom who has previously been taxed on the remittance basis prior to 2017/18, to remit to the UK without a tax charge ‘clean’ capital from overseas which was previously trapped within a mixed fund.

Remittance Basic Changes

A new short high level summary explaining that individuals who become deemed domiciled will no longer be able to use the remittance basis and will be taxed on worldwide income and gains.

Trust protections and capital gains changes

This new guidance primarily covers the new rules for offshore trusts. This includes income tax and capital gains tax ‘protections’ for offshore trusts and how trust protections can be lost through tainting and the valuation of benefits received from offshore trusts.

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