Tax free remittances by non doms of personal effects

Non UK Domiciliaries can bring personal effects into the UK without this being classed as a remittance of overseas income. Note that it only applies to overseas income. So if you purchased some Jewellery overseas out of an overseas capital gain, by bringing the jewellery into the UK you would be taxed on the gain. The finance bill provides that clothing, footwear, jewellery and watches will qualify if they meet the 'personal use rule'. They will meet this if they are property of a 'relevant person', and are for the use of a 'relevant individual'. It then goes on to define 'relevant person' and relevant individual on the basis of the rules that apply to the alienation of overseas income or assets. This means that a relevant person includes not only the non domiciliary but also his spouse (or co-habitee) and children and grandchildren aged under 18. So you can gain the exemption for remittance of personal effects that are purchased out of overseas income providing it's used for you or your wife/minor children's/minor grandchildren's personal use. There could therefore be opportunities to purchase watches and Jewellery for these individuals from overseas income and bring them to the UK without crystallising a UK tax charge on remittance. It should be noted though that there are provisions that apply so that property which ceases to be exempt property is to be treated as remitted to the UK at the time it ceases to qualify. The finance bill specifically states that one situation where property ceases to be exempt property is where the property is sold while it is in the UK. As a result a remittance is treated as arising at the point the asset is sold. If therefore you were looking at using overseas income to purchase jewellery etc it would be important that this was not sold whilst in the UK.