Pre-entry planning for non-domiciliaries

Produced by Tolley in association with Helen Cuthbert
Pre-entry planning for non-domiciliaries

The following Employment Tax guidance note Produced by Tolley in association with Helen Cuthbert provides comprehensive and up to date tax information covering:

  • Pre-entry planning for non-domiciliaries
  • Segregation of bank accounts ― splitting funds from different sources
  • Use of overseas funds while outside the UK
  • Credit cards
  • Foreign loss election
  • The use of trusts
  • Investment strategy
  • Deemed domicile rules (from 6 April 2017)

A non-domiciled individual becoming tax resident in the UK is in a special position with respect to the UK tax system because of the availability of the remittance basis (see the Remittance basis ― overview with employment focus guidance note). There are therefore a number of points that a non-domiciled individual should consider before becoming tax resident in the UK. If an individual is planning to establish UK residence and become employed in the UK, with employment duties outside as well as in the UK, they should look at maximising Overseas Workday Relief (OWR) or the possibility of dual contracts (although the rules on dual contracts were tightened in Finance Act 2014, their use may still be advantageous in some cases). See also the UK employment with non-UK workdays guidance note.

Segregation of bank accounts ― splitting funds from different sources

Clean capital can be brought to the UK without triggering a remittance charge. It is important that, after arrival in the UK, overseas clean capital is not mixed with interest earned on the funds, gains from the sale of other assets, or any other income received overseas. Clean capital is defined as assets (including cash) held before becoming UK tax resident. It may also include subsequent inheritances and gifts.

The freezing of offshore bank accounts ensures that no further funds are added to the accounts after the individual becomes UK resident; new offshore accounts should be opened. Care will be needed where the funds are kept in any foreign currency as, although foreign currency bank accounts are not themselves treated as separate assets for capital gains tax purposes, foreign cur

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