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Follow on Google News | Proposed tax changes: What impact for UK resident non-domiciles?Russell Bedford Isle of Man firm comments on Labour’s plan to abolish non-domicile rules
It is difficult to say what exactly is proposed, but it would appear that the proposal is: - Changes as from April 2016 - A period of transition for existing non-domiciles for say 2 years - A new regime for temporary residents say for 2-5 years. Labour has previously had this abolition as a manifesto pledge and did look at it whilst in power, but during their 13 years of Government until 2010 they did not abolish the regime, one presumes because of the risk to tax receipts and the wider UK economy. Labour have published a note on six things you need to know about the non-domicile rules. http://www.labour.org.uk/ Some of this is simply wrong or quite misguided. In particular in point 4 – it states that the system isn’t copied elsewhere in the world, which is simply incorrect, e.g. Ireland has a pretty identical system. There are also many jurisdictions that tax income on a remittance or territorial basis. It then quotes that ‘for example US residents … pay US tax on their worldwide income”. It doesn’t mention that the top rate of federal tax is 39.6% and applies to income over USD 413,200 compared to the Labour proposal for tax at 50% on income over £150,000. In terms of practical steps for existing UK resident non-domiciles it is probably too early to take immediate action and it will be best to wait until after the election to see how matters develop. It is worthwhile though to review the overall robustness of any existing structures and in any case it is worth checking that there have been no accidental remittances, particularly in light of the automatic exchange of information next year under the UK IGAs. For individuals considering moving to the UK it appears that there will still be a 2-5 year period where the existing rules will apply so there is still an element of stability. SMP Group (Isle of Man) is a member of Russell Bedford International, a global network of independent firms of accountants, auditors, tax advisers and business consultants. ENDS Note to Editors About Russell Bedford International Established in 1983, Russell Bedford International is a global network of independent firms of accountants, auditors, tax advisers and business consultants. Ranked amongst the world's leading accounting and audit networks, Russell Bedford is represented by some 600 partners, 5000 staff and 290 offices in more than 100 countries in Europe, the Americas, the Middle East, Africa and Asia-Pacific. Russell Bedford International is a member of the IFAC Forum of Firms and a member of EGIAN, the European Group of International Accounting Networks and Associations. Contacts: Justin Scott Tel: +44 1624 683262 Email: justin.scott@ Tony Dowling Tel: +44 1624 683254 Email: tony.dowling@ Rachael Hooper Tel: +44 1624 682267 Email: rachael.hooper@ End
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