1. Expats, Non-Doms and UK-bound Entrepreneurs
Whilst the UK tax rules for expats, internationally-mobile entrepreneurs and non-domiciled individuals are complex and have changed significantly over the past few years, the UK (pre- and post-Brexit) continues to remain an attractive destination for many entrepreneurs and families.
We offer a range of onshore and offshore advisory services and compliance services to clients coming to, returning from, or leaving the UK.
It can be difficult to structure your affairs tax-efficiently whilst complying with reporting obligations in multiple jurisdictions, and failure to do so can result in unwanted penalties.
We can help you with understanding the UK tax rules.
Whether your work, lifestyle or other commitments require you to plan your visits to the UK in advance, or you require tax-efficiency across complex tax structures, we can assist by providing the following services:
- Pre UK entry and exit tax planning;
- UK tax compliance;
- domicile reviews;
- Investor visa tax planning;
- analysis of remittance basis versus arising basis;
- bank account segregation planning and analysis, including keeping clean capital, and dealing with mixed funds;
- remittance basis planning, including funding requirements in the UK;
- non-dom to UK-dom spouse elections;
- UK remittances into UK companies under the business investment relief scheme; and
- deemed domicile and inheritance tax planning.
Our integration with LANCE helps clients who have international trusts ensure compliance with UK legislation, and the identification of potential savings.
A person’s domicile is typically the place one considers their permanent home. A domicile can either be inherited or acquired. Unlike residence, there is no one legal test to determine one’s domicile, but various factors are considered (including assessing one’s centre of vital interests for factors such as personal and economic connections).
Whilst it is possible to be resident in more than one place at any one time, it is only possible to be domiciled in one jurisdiction.
Determining one’s domicile can be a complex matter and is open to challenge by HMRC.
Generally all UK residents are taxed on their worldwide income and gains (arising basis). However non-UK domiciled individuals can elect to be taxed on the remittance basis. This means that their foreign income and gains will only be taxable in the UK, as and when they are remitted to the UK.
Remittances to the UK are not just limited to the transfer of money, and can take various forms. Significant care should be taken to avoid an unintended UK tax consequence.
A non-UK domicile can switch between these the remittance and arising basis, but care needs to be taken with this approach.
There is no charge for claiming the remittance basis for the first seven tax years of UK residence. However, making such a claim means you are not entitled to the tax-free income and capital gains allowances for that year.
Where an individual has been resident for more than seven of the previous nine tax years, they must pay £30,000 for each further year they wish to claim the remittance basis. This rises to £60,000 once they have been a UK resident for more than 12 of the previous 14 years.
Once an individual has spent at least 15 of the previous 20 tax years in the UK, they become ‘deemed domicile’ for tax purposes, and it is no longer possible for an individual to claim the remittance basis. They must instead pay tax on their worldwide income and gains.
If you have any questions or need further advice in this area, please get in touch and we will be happy to discuss further.