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Reforms to the taxation of non-UK domiciled individuals - steps to take now

April 2017 changes


The UK Government’s reforms to the taxation of non-domiciled individuals have now been published in what is expected to be final form. With the implementation date of 6 April 2017 fast approaching, affected clients who have not already taken action should be urgently considering the impact of the reforms and, crucially, whether any steps should be taken before 6 April.

Although the headlines refer to the new ‘deemed domicile’ status to apply to non-UK domiciled individuals (“non doms”) who are resident in the UK for 15 years of more, some of the new rules apply to all non-doms. In addition, all offshore trusts with UK resident settlors or beneficiaries will be affected, regardless of whether or not the settlors or beneficiaries are deemed-domiciled.

As such, this note is of importance to all non-doms, not just those who will become deemed-UK domiciled from 6 April 2017.

Action Needed

Some actions for non-doms who will become deemed-UK domiciled from 6 April to consider include:

  • Making gifts to children or other family members before 6 April. Gifts of non-UK assets by a non-dom before becoming deemed-domiciled will fall outside the scope of inheritance tax altogether.
  • Making trust distributions before 6 April. This is particularly important if the trust’s settlor and / or beneficiaries will become deemed-UK domiciled from 6 April. Distributions made to a non-dom before becoming deemed-domiciled can be sheltered by the remittance basis if the distribution is retained offshore.
  • Establishing new trusts before 6 April. Trusts which hold non-UK assets will
  • provide ongoing inheritance tax protection, even if the settlor subsequently becomes deemed domiciled.
  • Considering the capital gains tax rebasing rules. The rules allowing rebasing to market value at 5 April 2017 should be considered on an asset-by-asset basis and valuations obtained for assets being rebased.

Some opportunities for all non-doms to contemplate include:

  • Review and confirm domicile status. Clients should ensure their ties to the UK are not indicative of an intention to remain in the UK indefinitely and therefore the acquisition of an actual UK domicile. Where appropriate, domicile statements should be prepared.
  • Considering the proposed “unmixing” rules. Clients should review any cash accounts comprising mixed funds and identify assets purchased with mixed funds.
  • Consider bringing forward ‘onward gifts’. A proposed ‘anti-conduit’ rule will apply from 6 April. This will result in a tax charge on certain gifts to UK tax residents, if the donor received a distribution from a non-UK trust in the 3 years preceding the gift and the gift is not to a ‘close family member’. These rules are designed to prevent distributions from trusts being made to non-UK taxpayers, but then being given tax-free to UK taxpayers.
  • Carry out a thorough review of trust investments. In some cases, historic investment guidelines may not be appropriate after 6 April 2017.


The window of opportunity to carry out restructuring prior to the introduction of the new rules on 6 April is rapidly closing. Affected non-doms who have not yet sought advice should do so immediately.

Please contact your usual Maitland advisor with any queries regarding this bulletin.

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The information and opinions herein are for information purposes only. They are not intended to constitute legal or other professional advice, and should not be relied upon as such or treated as a substitute for specific advice relevant to particular circumstances. Maitland accept no responsibility for any errors, omissions or misleading statements in this publication, or for any loss which might arise from reliance on the material. No mention of any organisation, company or individual, whether on these pages or not, shall imply any approval or warranty as to the standing and capability of any such organisations, companies or individuals on the part of Maitland.