The October 2024 budget proposes a number of very significant changes for those who were previously considered “non-domiciled” for tax purposes, with effect from 6th April 2025.

James Rivett KC and Emma Chamberlain are private client tax specialists who act for both clients and HMRC. They take a balanced look at some of the fundamental features of the proposals highlighting some of the main features, explaining what the new rules will do, what they don’t do, how they will/may work, who is affected and what one should be thinking of doing now if you are or are advising someone previously treated as a “non dom”:

• (2.07) Rewrite of the relevance of domicile.
• (2.36) The background to the proposed changes and what we can expect in the months to come, including HRMC’s technical note of 30th October 2024.
• (6.37) The new regime for “qualifying new residents” – part of the abolition of the remittance basis. They identify some of the potential difficulties such as the fact you cannot claim later and also the matching rules are affected.
• (11.45) Transitional reliefs.
• (26.09) Why the remittance basis is still relevant.
• (30.22) Changes to Inheritance Tax for both individuals (30.22) and trusts (36.18).
• (41.40) Transitional provisions including discussion of the relevant property regime and new exit chanrges (45.40), funding the new charges (49.55) and double tax treaties (51).
• (54) Should you consider leaving the UK?
• (57.57) Should you consider coming to the UK?

Addendum: If you are foreign domiciled and deemed domiciled but leave by April 2025 only a 3 year tail applies; if you are foreign domiciled and not deemed domiciled but have been here for more than 10 years no three year tail applies if you leave by April 2025.

Useful links

HMRC’s technical note of 30th October 2024:Reforming_the_taxation_of_non-UK_individuals.pdf

“Trust Taxation & Estate Planning” – Chamberlain & Whitehouse (Sweet & Maxwell) 5th edition 2024

Legislation

Acts referred to

Inheritance Tax Act 1984

Taxation of Chargeable Gains Act 1992

Taxation (International & Other Provisions) Act 2010

Taxes Management Act 1970

Income Taxes Act 2007

Finance Bill – 7th November 2024 – schedule 9: Finance Bill publications - Parliamentary Bills - UK Parliament

Particular clauses referred to

Section 809L ITA 2007

Section 809P(12) ITA 2007

IHTA S49(1) taking precedence over s48(3)

FA 1986 Section 102(4)

Cases

Sehgal v HMRC [2024] UKUT 00074

Addendum:

If you are foreign domiciled and deemed domiciled but leave by April 2025 only a 3 year tail applies; if you are foreign domiciled and not deemed domiciled but have been here for more than 10 years no three year tail applies if you leave by April 2025

Now the dust has settled following publication of the 30th October 2024 budget, Kevin Prosser KC and David Yates KC give their thoughts on certain aspects of the budget, looking at important changes to CGT and IHT, and against the backdrop of the GAAR (general anti-abuse rule).

Kevin and David's discussion covers:

Capital Gains Tax (from 2.17 minutes)

• new anti-forestalling provisions
• unconditional contract planning and the use of overseas entities
• investors' relief in respect of gains on sale of shares in listed companies
• pilot trusts
• the consequences of the transfer of assets when limited liability partnerships become body corporates (s59A and s59AA TCGA)
• employee ownership trusts (ss236H - P of TCGA 1992)

Inheritance Tax (from 25.21 minutes)

• employee benefit trusts
• Post 6 April 2026 tax planning (partnerships, reorganising share capital) now APR and BPR has been reduced
• actual domicile/domicile of choice

The implications of the budget on "non doms" will be discussed by James Rivett KC and Emma Chamberlain in a separate podcast.

Cases and legislation referred to

WT Ramsay Ltd v IRC [1982] 2 AC 300

Rysaffe v IRC [2003] EWCA Civ 356

Barker v Baxendale Walker [2017] EWCA Civ 2056

Finance Act 2020

Finance Bill 2024

Inheritance Tax Act 1984 (in particular ss 13, 28, 86)

Taxation of Chargeable Gains Act 1992 (in particular ss17,18, 28, 59A, 59AA, 236H - P)

Keep up to date with all things tax law related with the Pump Tax Chat, brought to you by leading UK tax set, Pump Court Tax Chambers. In our latest episode, Laura Poots and Ben Elliott discuss the latest case law developments in HMRC’s powers of assessment, for both direct and indirect tax. They cover issues of carelessness, deliberate behaviour and protective assessments.

All the legislation and cases mentioned in the podcast as well as a transcription of the episode can be found on the podcast page on our website here.

You can find out more about Pump Court Tax Chambers here and on the speakers here:

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