Sovereign investors likely to face tax liability

The Treasury is consulting on plans to modernise the tax treatment of foreign sovereign investors, such as heads of state and sovereign wealth funds, to bring the UK in line with the US and Australia

Currently, foreign sovereign persons - including heads of state, monarchs, and sovereign wealth funds (SWFs) – are exempt from direct taxation on all their UK income. The consultation sets out the government proposal to legislate and narrow this exemption.

The reforms are likely to come in from April 2024 that would clarify the rules and ensure they deliver better value for money for UK taxpayers.

The government does not expect the proposals to have a material impact on foreign investment into the UK.

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