The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The concept of deemed domicile was introduced for income tax and capital gains tax (CGT) from 2017/18 onwards. As part of these provisions, non-domiciliaries:
caught by the deemed domicile 15-year rule in 2017/18 can rebase their foreign chargeable assets for CGT purposes as at 5 April 2017, see the Deemed domicile ― rebasing for capital gains tax (2017/18 onwards) guidance note
have a one-off opportunity to clean up existing mixed funds
For the details of the deemed domicile rules, see the Deemed domicile for income tax and capital gains tax (2017/18 onwards) guidance note.
Once a person becomes deemed domiciled for income tax and CGT, he is taxed on the arising basis. Due to the way the mixed fund rules work, non-domiciliaries approaching the date on which they become deemed domicile would find it expensive to reorganise their affairs. The Government acknowledged these consequences, stating:
“...an individual with a mixed fund will find it difficult to bring any money from the fund into the UK without paying tax at their top rate of tax when they do so. For some, this will be a punitive outcome, as the fund will be comprised of a mix of both foreign income which would be taxable at the highest rate of tax as well as money that would be taxable at a lower rate; for example, foreign gains which would be taxed at a top rate of 28% or clean capital, which would not be taxable at all even when remitted.”
Second consultation document (Aug 2016), section 3.15
Therefore, there is a one-off opportunity for non-domiciliaries with mixed funds to separate them into their constituent parts. The individual has until 5 April 2019 to complete this ‘clean-up’ of his mixed funds.
Note that the professional bodies have compiled guidance for advisers on mixed fund cleansing in the form of questions and answers. The guidance was originally published in March 2018, and in March 2019 this was updated to include comments from HMRC.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
The rent-a-room scheme was introduced in the early 1990s to encourage homeowners to take in lodgers.Fundamentally, the rent-a-room scheme is a relief which means that the rent received by an individual from a lodger (up to a prescribed limit) can be exempt from income tax. If the gross rents are
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.