Non Doms & timing departures/arrivals from the UK

For most people arriving in or leaving the UK they'll be looking to claim the benefit of the split year basis. This means that:

For non doms leaving the UK they'll only be UK resident up until their date of departure, and

For non doms coming to the UK they'll only be UK resident as from their date of arrival. The split year basis isn't set out in the legislation but is given by virtue of Extra Statutory Concession (ESC) A11. Broadly speaking anyone leaving the UK will get the benefit of the ESC if they leave permanently or under a full time contract of employment. The key benefit of being treated under the concession as opposed to under the general rules is that you can be non resident for a specific part of the tax year. The main advantage in this is that foreign income is then free of UK income tax. For any non doms who are leaving the UK (or arriving in the UK) they may be looking to take advantage of the £2,000 exemption. This ensures that provided unremitted income or gains are less than £2,000 there is no loss of UK allowances or requirement to pay the £30,000 tax charge. However when considering whether the 'below £2,000 threshold' limit applies the level of unremitted foreign income and gains for the entire tax year must be taken into account. So just because you left the UK and your income after you left was free of UK tax this would not mean it wouldn't be included when assessing whether you had £2,000 of unremitted income. Similarly if you arrive in the UK,your overseas income before you were UK resident, although free of UK tax would be taken into account when looking at whether you had exceeded the £2,000 level. Example Patrick arrives in the UK on 25 October 2011, and he is resident for the tax year 2011-12. He claims split-year treatment under ESC A11. He has foreign bank interest for the period 6 April to 24 October 2011 totalling £2,400. He has further bank interest of £1,100 arising between 25 October 2011 and 5 April 2012. He remits £1,000 to the UK in that year. At the end of the year his total unremitted foreign income is £2,500. Even though he's claimed split-year treatment for 2011-12, he still has to include any foreign income that arose before he entered the UK. In this case Patrick could remit the £2,400 free of UK income tax, given this arose before he was UK resident. However, it's likely this would be classed as a mixed fund in this case. As such he'd be classed as remitting the £1,100 taxable bank interest before the £2,400 tax free 'capital'. Capital Gains Similar principles apply to capital gains of any non doms coming to or leaving the UK. In order to claim the £2,000 exemption unremitted gains must be less than £2,000. However the relevant ESC (D2) states that an:

individual arriving in the UK who has not been resident or ordinarily resident in the UK for five years before the year of arrival is not chargeable on capital gains made between the start of that tax year and their date of arrival

An individual leaving the UK who was not resident and not ordinarily resident in the UK for at least four out of seven years before the year of departure is not chargeable on capital gains made between the date of departure and the following 5 April However just as for income tax purposes above you still need to include capital gains that arise in the 'non resident' part of any split year when looking at the £2,000 exemption. £30,000 tax charge When looking at the £30,000 tax charge you include any year of departure or arrival as a complete tax year. The £30,000 tax charge only applies to UK residents who have been resident for at least 7 of the last 9 tax years. Therefore this means that:

When assessing the number of tax years you've been in the UK for the £30,000 tax charge you include any tax years you were UK resident for part of the year. So if you arrived in the UK partway through a tax year you would still include it.

Similarly the £30,000 charge isn't split even if you leave the UK partway through a tax year and claim the remittance basis. So if you are liable to the £30,000 tax charge and have substantial overseas investment income you may well claim the remittance basis. If you left the UK half way through the tax year to move abroad you would still be subject to the full £30,000 tax charge.