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Thursday
Jan162014

Accountants warn non-doms of increased remittance charges

UK residents who are not domiciled may be liable to pay higher charges if they cannot fully account for their movements over the last 14 years.

Non-doms can choose to be taxed on a ‘remittance basis’, which is the reason that so many wealthy foreign nationals choose to take advantage of the status. Under the remittance rules, all UK income is taxable, along with any foreign income remitted to the UK. This includes the transfer of funds from offshore accounts, the purchase of assets within the UK, or using money from an overseas account. The main advantage of the non-dom status is that all overseas assets are not taxable.

Non-doms have always paid a charge of £30,000 for the privilege, but for the first time a higher charge of £50,000 will apply for those who have resided in the UK for 12 of the past 14 years. As the 31 January deadline for self-assessment tax returns approaches, accountants are warning that those who continue to pay the £30,000 may have to account for their movements over the whole 14 year period. If they cannot do so to HMRC’s satisfaction, they may incur a penalty fine as well as interest.

The government has recently released a guide on changes to the remittance rules, which is 56 pages in length.

The rules surrounding non-dom status in the UK are complex and subject to numerous grey areas. For example, someone who transfers foreign income to a UK charity will be liable to a tax charge. The criteria can be difficult to understand, but you may be able to take advantage of the non-dom status. Why not ask the experts at St Matthew if these advantageous tax-regulations are worth considering? Visit stmworldwide.com/non-domiciled-taxation for more details. 

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