Remittance tax

Non UK domiciliaries are subject to the remittance basis of tax. This means that they're only taxed to the extent that income or proceeds are actually brought into the UK. Therefore when looking at the position of foreigners living in the UK, the first and most obvious piece of advice to avoid UK imcome tax or CGT on overseas income or gains is to simply retain any income or proceeds overseas wherever possible. You could for example, invest the cash in an offshore account or invest in overseas property/investments. It doesn't really matter what you do with it provided you keep the cash out of the UK. If the non dom has a significant UK income, this will probably be the best option - but what if they actually need some of that cash in the UK. A useful planning technique is to use separate capital and income accounts. Capital and Income accounts This is particularly useful where the non dom has some existing capital before they come to the UK. To use this technique the non dom will need to have at least three overseas bank accounts: The first account for any existing capital. The second account to deposit the proceeds of any asset disposals. The third account to contain the interest from the first two accounts, along with any other foreign source income. The idea is to separate the foreign income and gains so that any cash that is brought into the company can be clearly tracked and remitted most tax efficiently. As a general rule you want to bring existing capital into the UK (as this can be brought in tax free). Next you'd want to bring in proceeds from disposals as the tax reliefs for CGT are higher than income tax, and you are permitted more deductions. Finally, and as a last resort, you'll be bringing in overseas income earned after you became UK resident. This means you'll be bringing cash into the UK in the order of account 1,2 and then 3. We've got a number of tax articles on domicile including:
Reducing Uk taxes by using your domicile status
How to establish non UK domicile when you leave the UK
How CGT is calculated if you're a non UK domiciliary
When is domicile relevant in determining your tax liability for the purposes of your tax return

You can also see more on domicile in this tax book: Non Resident and Offshore Tax Planning