In a swift move to clamp down on the manner in which individuals claim non domiciled status avoid paying domestic tax on their earnings, Chancellor George Osborne said this would be abolished, with the effect of raising £1.5bn
The status – which has been in place since 1914 - was claimed by approximately 115,000 individuals in 2012-13, according to HMRC, of which 67,000 paid tax on all their income and capital gains around the world. The 48,000 remaining individual chose to be taxed on the remittance basis. Under these arrangements HMRC taxes only their income and gains generated in the UK or remitted to the UK. Depending on the amount of time spent in the UK, non doms can be subject to an annual tax ranging from £30,000 to £90,000.
The government intends to amend the rules on excluded property so that trusts or individuals owning UK residential property through an offshore company, partnership or other opaque vehicle, will pay IHT on the value of such UK property in the same way as UK domiciled individuals. The measure will apply to all UK residential property whether it is occupied or let and of whatever value.
