UK reforms taxation of non-domiciled individuals

Consultations will last up to 09 September 2011

At Budget 2011 the Government announced that it would reform the taxation of non-domiciled individuals (“non-domiciles”) by: •increasing the existing £30,000 annual charge to £50,000 for non-domiciles who claim the beneficial tax regime (“remittance basis”) in a tax year and who have been UK resident for 12 or more of the 14 years prior to the year of claim;
•enabling non-domiciles to remit overseas income and capital gains tax-free to the UK for the purpose of commercial investment in UK businesses; and
•making technical simplifications to some aspects of the current remittance basis rules to remove undue administrative burdens.

The Government recognises that non-domiciles can make a valuable contribution to the UK economy and wants to encourage them to invest in the UK, contributing to its priority of generating growth. These reforms include a significant new incentive for inward investment.

However, non-domiciles currently benefit from tax rules that provide significant advantages over other taxpayers. These reforms will ensure that non-domiciles make a greater tax contribution, especially when they have been resident in the UK for many years. This consultation seeks views on the detailed policy design of the changes announced in the Budget.