Date: 21 May 2024
Labour have made a brief announcement in response to Chancellor Jeremy Hunt’s plans to abolish the non-dom regime. There is even less information to go on than the Budget documents. Where information is lacking, speculation takes its place and so we will keep this update brief:
Labour appear to be proposing further incentives to invest tax-free in the UK in the first four years in the UK, and also to encourage further remittances to the UK of historic overseas income and gains not previously taxed in the UK so that the legacy of the remittance basis can be all but eliminated.
The transitional provision allowing a 50% reduction on UK tax for foreign income and gains is likely to be axed under Labour proposals.
Most significantly is the proposal not to grandfather the IHT free status of non-UK assets in trusts settled by non-doms. This could make for a very different tax landscape for settlors or beneficiaries of such trusts, but since nothing further is known it is still too early to make concrete plans.
Politics is a fickle beast and so we will refrain from commenting further until more is known! For some suggestions of possible courses of action please refer to our Q&A here. Please look back at the Non-Dom section of our website for further updates in due course. Charter Tax will be represented on the HMRC consultations and we should therefore be able to provide more insight on the current Government’s position in due course.
Disclaimer
The information provided by Charter Tax Consulting Limited is general in nature and does not constitute specific tax advice. Professional advice should be sought before deciding on a course of action, or refraining from a certain action, arising from the above information. Tax legislation changes regularly and the information contained herein is provided based on legislation as at 21 May 2024
For and on Behalf of
CHARTER TAX CONSULTING LIMITED
8th FLOOR, 1 SOUTHAMPTON STREET
LONDON, WC2R 0LR