Last updated: 27 March 2017
They noted that after the changes on April 6, individuals will no longer be able to benefit from the advantageous remittance tax arrangement, and will now be liable to pay UK tax on their worldwide income, and pay capital gains and inheritance tax on their worldwide estate, so long as they are a UK resident. The article included Carlo Gray’s quotes from the press release.
British expats beware: tax changes on return to UK imminent
British expats returning to the UK to live will be taxed on their worldwide income, as the British government seeks to reform the non-domiciled rules. The new rules were announced following the UK Spring Budget last week, and are destined to go ahead from April 6 2017.
Previously, British expats who wished to return to the UK, after having lived abroad for a number of years and acquired a foreign-domiciled status, for instance in Hong Kong or Singapore, could previously benefit from the remittance basis of taxation, an advantageous tax arrangement with the British tax authorities, compared to other British citizens who have a UK-domiciled status.
Carlo Gray, partner and head of Buzzacott expatriate tax services in Hong Kong explains, “There are significant UK tax changes ahead for British citizens born in the UK with a UK domicile of origin, which has subsequently been displaced by a domicile of choice after living many years outside the UK, as is so common in Hong Kong and Singapore.”
After the changes on April 6, such individuals will no longer be able to benefit from the advantageous remittance tax arrangement, and will now be liable to pay UK tax on their worldwide income, and pay capital gains and inheritance tax on their worldwide estate, so long as they are a UK resident.
“All trust and company income and capital gains will be taxed on them each year whilst they are a UK resident as if they had realized them personally,” states a recent release by tax advisory firm Buzzacott.
Gray explains, “If those individuals [British born non-doms] wish to return to the UK to live for any reason, they will be subject to UK tax just like any other UK resident and domiciled taxpayer. We have had a flurry of enquiries recently in respect to Brits returning to the UK for work or for their children’s education and these new rules are resulting in them having to think very carefully about the implications and their long-term plans.”
Article first seen on The Asset.