Domicile Tax Changes

From April 2017, individuals who have been resident in the UK for more than 15 out of the past 20 tax years will be treated as domiciled in the United Kingdom for all tax purposes.  This will be known as the “15-year rule”.

This means that these individuals will have to pay UK income tax on their worldwide income, not just income which they bring into the UK (known as the “remittance basis”).  They will also be deemed domiciled in the UK for inheritance tax purposes.

Individuals who were born in the UK and had a domicile in the UK at their time of birth will revert back to having a UK domicile for tax years when they are treated as resident in the UK, even if they acquired a foreign domicile after birth.

Individuals who acquire a deemed UK domicile under the 15-year rule will lose it again once they leave the UK and have spent five years outside the UK.  This is likely to be relevant for inheritance tax purposes only.

Individuals who have a domicile of birth in the UK, acquire a foreign domicile and return to the UK will cease to be UK-domiciled when they leave the UK, so long as they satisfy the 15-year rule and have not acquired a domicile of choice in the UK.  Otherwise they will retain their deemed UK domicile for a further five years.

From April 2017 the government intends to bring all UK residential properties which are owned by foreign-domiciled persons within the charge to UK inheritance tax, even when the property is owned indirectly through an offshore company or partnership.  Currently only UK property which is owned directly by non-domiciled individuals is within the charge to inheritance tax.  From April 2017, trusts or individuals owning UK residential property through an offshore company or partnership will pay inheritance tax on this in the same way as UK-domiciled individuals.  This measure will only affect UK residential property and not other assets.

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Oct 23

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For anyone looking for an accountant that ­understands the crazy world of dentistry, then look no further than Dodd & Co. Since taking us on as clients they have understood our needs and told us in no uncertain terms what we must do if we are to succeed. We use them for a full range of services; so many members of our team are in contact with many members of their team. Whatever the ­question, whether it is to the PAYE dept about maternity rights and pay or if we need assistance forecasting figures for the future, it is always dealt with professionally, accurately and quickly. Each and every member of the staff at Dodd & Co is friendly and approachable. They will do all they can to help, and if they can’t help you, they will find a man (or woman) that can. They are quite happy for you to call if you just want to “pick their brains” about something. We use them as a great sounding board to compare where we are locally and nationally, as they have a wealth of statistics on dentistry as a whole. Quite simply, we cannot say enough good things about Dodd & Co and don’t know where we would be without their sound and honest advice.  
-- Ghyllmount Dental Practice