• ICAEW
  • XERO GOLD PARTNER
  • KASHFLOW

 

0161 928 3276

 

 

We understand our clients

Tax Advantages of Non-Domicile Status

Newsletter issue - October 07.

Your domicile is broadly the country that is your natural home. This is normally the country where you live permanently such as the UK, but if you were born in another country, or your parents were born in another country, your domicile may be that other country. In this case you are treated as not having a UK domicile, i.e. be non-domiciled in the UK.

There are advantages to being non-domiciled while living in the UK...

  1. Income and Capital Gains. If you have income or capital gains that arise outside of the UK, those amounts will not be taxable in the UK unless you bring the money into the UK. This process of bringing funds into the UK is called a making a remittance. It is easy to accidentally remit money to the UK from off-shore sources, for example when a cheque passes through the UK banking system it is treated as being remitted to the UK, even if the funds are immediately paid out of the country again. If you do have non-domiciled status you need to fully understand the remittance rules to ensure you keep your off-shore funds completely separate from any UK earnings.
  2. Inheritance Tax. If you have lived in the UK for less than 17 tax years, and you are non-domiciled in the UK, any assets you have which are located outside of the UK are not subject to UK inheritance tax, although they may be taxed in the country where they exist. This advantage for inheritance tax disappears once you have been resident in the UK for more than 17 tax years out of the previous 20 years, so any action required to protect those off-shore assets from UK tax needs to be taken before that 17 year deadline is reached.

It is possible to change your domicile, but it is not a straightforward process. Say you emigrate to France, and cut all your ties with the UK, you could be said to have given up your UK domicile and taken on a French domicile. However, if you later express a desire to return to live in the UK, the Taxman will argue that you never gave up your UK domicile. This has implications for inheritance tax as your worldwide estate is subject to UK inheritance tax if you die with a UK Domicile, even if you have lived outside of the UK for many years.

If you believe you could be not domiciled in the UK please talk to us about tax planning as soon as possible.

 

To work Smarter in your Business Contact Beauchamp Charles

Contact Us

"Join our newsletter for hints, tips and tax advice"

 

What our clients say

Dakins Property Services

Great Results, Personable, High Integrity

Choice Events Limited

All at Beauchamp Charles are very helpful, approachable and easy to talk to. They keep me informed with key dates; I can feel totally confident that I won't ever miss any deadlines! Whoever I deal with, always deal with matters professionally and efficiently and if they are unavailable they get back to me promptly.

FT leisure Ltd

I have worked with Beauchamp Charles as our management accountants for over 20 years and have never received anything less than exceptional service. Their approach is both professional and personal. Finances and particularly tax strategies are a minefield for small businesses; Beauchamp Charles have in-depth knowledge of these area, which is comforting. They pay very close attention to our business activities and have provided financial strategies that have helped our company develop.

Fredrick Thomas Electrical and Maintenance

We have used Beauchamp Charles since company formation back in 1998. Beauchamp Charles offers us a one to one service as they are small enough to offer this dedicated service and large enough to do the work and offer best advice. They get to know us as individuals and a business, always giving sound advice. Frederick Thomas Electrical are in a stronger place thanks to the service we get from them.

Barnes Walker Landscapes Limited

We are a small business and had employed the same accountancy firm for many years. Two years ago we took the decision to switch to Beauchamp Charles after several othe local businesses recommended them very highly to us. We have not been disappointed with the service they have provided to us over these last two years.