Under current law, individuals domiciled outside the UK (often referred to as “non-doms”) receive favourable treatment for UK tax purposes in several respects. In particular, they may elect to be taxed on the remittance basis, meaning that non-UK income and gains will only be subject to UK tax if brought into the UK and, in addition, they are subject to UK inheritance tax only in relation to assets situated in the UK.
UK assets held by a non-dom through a non-UK company have for many years been treated by HMRC as being effectively non-UK assets for inheritance tax purposes and therefore exempt from inheritance tax. However, as announced by the Chancellor in the Budget on 8 July 2015, UK residential property held by a non-dom through a non-UK company will become fully subject to inheritance tax with effect from April 2017, these new rules are expected to catch offshore company structures which are already in place.
This therefore means that any person domiciled outside the UK, who currently owns UK residential property through a non-UK company, will need to reconsider their tax position. You are encouraged to contact us now to discuss the options available for re-structuring and the tax implications of those options.
Bishop & Sewell’s Private Client team can assist on all aspects of this change and how it might affect you personally. For more information, please call Philip Vickery on 020 7631 4141 or email email@example.com.
Philip Vickery, Senior Associate, Tax, Trusts and Estates Team.