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Non Domicile Tax Q&A
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Non Domicile Tax Consultancy Questions
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Tax treatment of non dom on Bermudian trust income - USERNAME: t.dhan
Tax Question: I have a client who moved to the UK from Bermuda in November 2011. He has now set up home in the UK and intends to remain a UK resident for the forseeable future. He has property in Bermuda yielding him an income. The property is written into a Bermudan trust (resident in Bermuda). if my client were to remit this income to the UK for consumption, is he liable to pay UK income tax on that income? At what point does he become liable? If the income was earned before he became a UK resident (pre-Nov 2011) but he still remits that income the the UK will he be liable to UK tax on that tranche? Rgds . . .
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Application of the exemption for £2,000 foreign unremitted income - USERNAME: esplin
Tax Question: My question relates to application of the remittance basis without completing a self assessment form S809E: I am non domicile resident and have immigrated to the UK with my wife in this tax year. I have relevant income in the form of interest in a statutory regulated transmission account held in my country of emigration. The interest is clearly defined. I have remitted funds to the UK in this tax year from the transmission account. The interest earned for the period that I have been resident in the UK is less than the £2000 threshold. Question: Considering s809E AND ESC A11 it would appear that I am not able to split the income (interest)and must include my full interest for the tax year when calculating Relevant Income?? Secondly is a further/second £2000 threshold able to be applied to my wife or does she need to have a separate transmission account and a separate bank account and UK tax return to generate her own £2000 threshold. Many thanks . . .
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Offshore tax planning structure for non dom -
USERNAME: rdiogo
USERNAME: rdiogo INTERESTED_IN: Hi, first of all i'm from portugal and a resident here now. i would like to know if this makes sense and it's a good effective tax planning: 1. i create an overseas company in a country where is tax free for example (hong kong, seychelles, bahamas, etc) 2. i change my residence to the UK and claim the non dom status and remittance basis. 3. i will be working from the uk as a self employed. 4. since i own this hong kong company which is doing the major part of the business, i get dividends from that and it's tax free. (i'm not a director on this company, i just own it) Does this make sense? if not can you provide me a working and legal solution to go to the uk and avoid taxes? Thanks . . .
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Questions on "enjoyment" to decide if a non dom is taxed on gifts - USERNAME: esplin
Tax Question: (MO)a non domicile UK resident "gifts/loans" cash from relevant foreign income to an adult son (Jo) who is UK resident. Jo purchases UK residential property and develops the properties and employees (Mo)as a consultant at arms length terms and fees. The sole benefit to Mo from the "gift/loan" is the employment of the monies to pay him a consulting fee. Mo after a year extracts his "gift" plus any after tax profits he has earned from his consulting services. Questions A) Is the consulting income treated as "consideration" under the conditional clauses and therefore the gift is treated as a taxable remittance. B) What is the impact on the definition of a taxable remittance having being made and the extraction of consulting services if the gift/loan was from Mo'clean funds which had no income or gains (ie Non relevant foreign income?) . C)Is the taxable remittance treatment different if the gift described above were an interest free loan as it turns out to be in the above scenario. C)If Mo receives no consulting fees is the gift/loan a taxable remittance. . . .
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Buying a UK property with a non dom husband - USERNAME: Jan
Tax Question: My sister who is Uk res UK Dom, is married to a greek man and they live in Dubai. He is keen to purchase a property in the UK as an Investment. I understand that he has no IHT implications, as a non dom but my sister would do, should he die and the estate goes to her. What therefore should they do to mitigate IHT and also does he have any CGT implications and any other taxes due. . . .
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Tax treatment of mixed fund/bond interest for non dom - USERNAME: ham1
Tax Question: A non-dom has accumulated untaxed interest offshore whilst being taxed on the remittance basis. For the purpose of his tax return the non-dom has nominated a separate account with notional income which has also remained offshore. The non-dom is committed to a long term offshore fixed interest bond earning annual interest, but from 6 April 2012 he will be taxed on the arising basis in the UK. This of course means that all the offshore income for that year will bear tax. Can the separately identified annual bond interest be brought back to the UK without any further tax being payable? Or will the general ordering rules kick in and this interest be treated as the first remittance of the untaxed interest already held offshore? . . .
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Non dom and remittances for flights or holidays in the UK - USERNAME: ham1
Tax Question: I understand that foreign holidays beginning and ending in the UK which are paid for from a non-dom's offshore bank account are treated as remittances to the UK. However what is the situation, for example with a Caribbean cruise, where the costs of flights to and from the destination are paid from the UK, but the cost of the cruise is paid from offshore funds? Is the cost of the cruise outside the scope of UK taxation? Furthermore if the non-dom is paying tax on the arising basis at that date would this have any relevance to the matter? . . .
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Best way for non dom to acquire foreign shares - USERNAME: Ng
Tax Question: If a UK Resident but Non Dom person is invited to subscribe for founder shares into a USA Business and later also acquires additional shares at a pre set price what is the best way to acquire these shares? Issue is that if the USA company is sucessful then it is likely that the potential gains from the shares will be very substantial. . . .
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Using an offshore (Seychelles) company for non dom tax planning - USERNAME: Fredrik
Tax Question: I am a Swedish national resident in the UK since 4 years back. I am not domiciled in the UK. I am employed in the UK. I have my own firm in the UK (which is currently not profitable and I am not receiving a salary). I also have an income stream from consultancy work in Sweden. I would be interested in moving the Swedish income stream off-shore to perhaps the Seychelles where I could charge the consultancy fee from the Seychelles company. Are there any UK tax implications by doing this? For my own firm in the UK, I would like to sell the trademark rights to the brand and pay royalties to the off-shore firm, e.g. Seychelles. Is this ok from a UK tax point of view? My own firm trades between China and the UK and is expanding globally. Could I organise the business so that all non-uk transactions and cash flow are between the off-shore firm and the clients? Can I introduce the profits to the UK from my off-shore company in e. g. the Seychelles? Above are some questions. . . .
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Questions on foreign capital loss election -
USERNAME: Accounting
Tax Question: I am UK resident and not domiciled in the UK. In the year 2008/2009, I had foreign capital losses, and I chose to declare using the arising basis of taxation, and I declared my foreign capital losses in the "capital gains summary" section of my tax return. 0) Can I use these losses against future capital gains? In the year 2009/2010, I had foreign capital gains, which were never sent to the UK, and I chose to declare using the remittance basis of taxation, and I didn't make an election for my foreign losses to be allowable. Now, in the year 2010/2011, I have foreign capital losses. If I choose to declare using the arising basis of taxation: 1) Should I declare my foreign capital losses in the "capital gains summary" of my return? 2) What is the treatment for this foreign capital losses of 2010/2011, specifically: 2.1) Can I use them against the foreign capital gains of the same year 2010/2011? 2.2) Can I use them against future foreign capital gains if in those future years I choose to pay on the arising basis? As a final general question: if my intention is to generate substantial foreign capital gains that will never be sent to the UK, is it in my advantage not to make an election for my foreign losses to be allowable? Thanks very much for your explanations. . . .
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Questions on losing non domicile status and the 17 year deemed domicile rule - USERNAME: tretretre
Tax Question: Thank you for the answers to my previous questions. Just to clarify, assuming I express my intention not to live forever in the UK, even if I obtain British citizenship, I would not loose my non-UK domicile status. But what could be the other compelling evidence that could be used to argue my domicile of choice has changed? I believe you are referring to domicile of choice because my domicile of origin will never change. Correct? And what matters at present for the remittance basis, domicile of choice or origin? Regarding my second question I should have clarified that for the first three years I was not ordinarily resident in the UK. Shall I start counting the 17 years for the deemed UK domiciled from 1998, i.e. from when I became ordinarily resident? . . .
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Non domicile and self assessment - USERNAME: simplyaccounting
Tax Question: An individual is a non-dom in the UK, who does not have any overseas income at all. Is it required to submit supplementary page SA109 : Residence, remittance etc with a cross in box 22 (if you are domiciled outside the UK and it is relevant to your income tax or capital gain tax liability put 'x' in the box) with Tax Return? or Sumbitting form P86 will suffice? or both is required. . . .
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Non dom and relief for foreign losses - USERNAME: eagle99
Tax Question: I would appreciate your comments on the following scenario. I am UK resident but non domiciled. I came to the UK in Aug 2002. My main source of income is my employment income which is taxed under PAYE. My income levels take me into the 50% rate. I have 2 offshore accounts which earn interest circa £500 per year and I have 2 further stockbroking accounts held offshore. In my stockbroking accounts, I realised capital losses of £6,000 in 10/11 tax year. Therefore assume my offshore income is £500 and my capital losses amount to £6,000 in 10/11. I have no other offshore income and capital gains. Please note these offshore accounts have been initially funded through my UK taxed income. Please note I have claimed remittance basis in tax years 2002/2003, 2003/2004, 2004/2005, 2005/2006, 2006/2007, 2007/2008, 2008/2009, 2009/2010 based on the £2,000 unremitted foreign income and capital gains limit (809D). My questions are as follows: 1) I am likely to qualify this year for automatic remittance basis as my foreign unremitted income and capital gains are below £2,000. Could I claim relief for foreign capital losses without making an election under S.16ZA by utilising Section 809D. 2) Do you need to make an election under Section 16ZA only if you unremitted foreign income is above £2,000 or do not need to make a claim regardless. 3) If I were to choose arising basis in 10/11, then I would have to pay 50% on £500 earned but would be entitled to claim 28% capital loss relief on £6,000 (assuming I have gains in the region of £20,000 arising in the UK). Am I correct in my assumption by paying £250 I am saving £1,680. 4) As I have been claiming remittance basis previously and not claimed capital losses under S16ZA in the past, if I was to opt for arising basis in 10/11 do you foresee any problems/advantages. 5) As I am losing my personal allowances anyway based on the income I earn, assuming I only have £500 income arising abroad every year, does it make sense to start opting to tax on the arising basis to claim capital losses which would otherwise be wasted and this way I could utilise these capital losses against future years gains which could be large but not enough to justify paying the remittance basis fee of £50,000 ie when it goes up. Many thanks for your help. . . .
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Questions on domicile and citizenship -
USERNAME: tretretre
ax Question: Dear Sirs I have two questions. 1) I am a non dom (born in Italy from Italian father) who has lived in the UK for 15 years. I am considering obtaining UK citizenship and passport. Might this, in any way, weaken my non-dom status? If that is not the case now, can you foresee that in the future having a British passport could undermine the non-dom status? 2) I arrived in the UK in April 1995 but only became UK resident after three years. From when should I count the 17 years for IHT deemed domiciled status purpose? From April 95 or April 98? Thanks and best regards . . .
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