The UK has had a favourable tax regime for those who reside in the UK, but whose permanent home is in another country – also known as “non-domiciliaries” or “non-doms”. In recent years, non-doms have become swept up in the tide of changing public attitudes towards tax and tax mitigation.
The mixture of negative public perception and the eagerness of the UK, and indeed other governments, to raise more revenues following the financial crisis, led to a considerable tightening up of the UK’s non-dom rules in 2008.
Despite this, the new Conservative Government announced some rather surprising and sweeping changes to the taxation of non-doms in the Chancellor’s summer budget which followed last year’s election.
The Budget included two major proposals:
- a restriction on the tax advantages available to non-doms; and
- a change in the taxation of UK residential properties held in corporate and other structures.
Both sets of changes are to take effect from 6 April 2017.