Changes to non-dom rules in the pipeline
As part of a raft of recently launched consultations, the government has unveiled its latest plans for the changes to non-dom status announced by the previous Chancellor in his 2015 Budget.
Under the plans, non-doms who are deemed to be long-term residents will be required to pay UK tax on their worldwide income.
The changes are designed to prevent people living in the UK with non-dom status permanently. Instead, anyone who has resided in the UK for at least 15 of the last 20 years will be considered to be UK domiciled for tax purposes.
One of the key implications of the policy relates to Inheritance Tax (IHT). Current rules mean that UK domiciles that leave the UK cease to be domiciled for IHT purposes if they have not lived in the UK for three years prior to their death.
Under the new rules, a permanent resident non-dom who had lived in the UK for 15 years until five years prior to their death would remain UK domiciled for IHT purposes.
To address this, the government proposes to treat people as domiciled in the UK for six years after they have left the UK or on the date they become domiciled in another jurisdiction, depending on which is later.