The institute sets out its views in a response to a government consultation on reforming non-dom rules published by the Treasury in January, which closed on 16 April. 

The consultation, Ensuring a fair contribution from non-UK domiciled individuals, considered plans to introduce a minimum claim period of three years, with the policy aim of preventing non-UK-domiciled individuals arranging their tax affairs so they do not pay the charge on a regular basis.

The document stated: ‘The government is seeking to reduce opportunities for non-UK domiciled individuals to arrange their tax affairs with the aim of not paying the charge on a regular basis. The government believes it is fair to ask those individuals who claim the remittance basis to commit to paying the charge for a minimum period when they have been resident in the UK for at least seven out of the previous nine years.’

The new rules, expected to apply from April 2016, would mean the RBC would be payable for three consecutive years, whether or not overseas income and gains were actually remitted in the UK.

ICAEW is concerned that ‘constant tinkering with the RBC rules causes uncertainty which deters foreign investors. We recommend that before making further changes to the regime a rigorous cost-benefit analysis be undertaken to ensure the full effects of the changes are well understood before they are made’.

ICAEW is calling for a minimum opt-out period to allow a taxpayer to opt out of the remittance basis whenever they chose but they could then not opt back in until a certain period had expired. According to the institute, this would help individuals who had suffered a life-changing event such as divorce or bankruptcy. ICAEW notes: ‘This may be perceived as less of a revenue raiser, but it is far more consistent with the principle that the remittance basis is an exception to the basic principle of worldwide taxation of UK residents.’

It would also like to see a cut-off after a fixed number of years of UK residence with the count starting once the non-UK-dom ceases being active in UK business; or requiring the individual to prove they remain non UK domiciled in order to claim remittance basis.

There have been a number of changes to charges for those claiming non-dom status since the coalition came to power.

Most recently, in Autumn Statement 2014, the government announced that from April 2015, the remittance basis charge would increase to £90,000 for those who have been UK resident for 17 of the last 20 years, while the charge for those resident for 12 out of the last 14 years would rise to £60,000 from the current £50,000 level – a measure expected to raise £120m in 2016-17 and then around £90m a year through to 2020.

It will therefore increase the remittance charge for non-domiciles who have been resident in the UK for 12 of the past 14 years, and introduce a new charging point for those who have been resident for 17 of the past 20 years.

Both the Labour and SNP manifestos pledge to abolish non-dom status, except for short-term workers seconded by multinationals and students.

The Liberal Democrats propose scrapping the inherited basis for non doms, which allows non-domiciled individuals to pass on their tax status to their children.

The consultation document is available here