Non Doms to have their tax affairs centralised - be prepared for a challenge
In advance of this year’s Budget which is expected to make some changes to the complex new rules for Non Domiciled UK Resident individuals (Non Doms), HM Revenue & Customs (HMRC) have announced that most individuals who pay the £30,000 Remittance Basis Charge will be transferred to a specialist office in Nottingham.
HMRC have also announced that they will no longer process Forms DOM1 (withdrawn) or P86 (to be replaced without the domicile questions) which are designed to provide a “ruling” on an individual’s domicile status. In future it is entirely up to an individual to decide their own domicile status when submitting their Self Assessment tax return and HMRC will be able to challenge this via the normal enquiry process. It appears that HMRC may be looking closely at individuals who have lived in the UK for a number of years but still claim to be a Non Dom even though HMRC gave a “ruling” previously. Their website states:
“For example if an individual had advised HMRC on their arrival in England a decade or so ago that they planned to leave the UK after five years but had since married, had a family and decided to make England their permanent home then they will have adopted a domicile of choice within the UK.”
They have also stated that even where a claim for the remittance basis has not been challenged for a particular year
“…..it does not mean HMRC necessarily accepts the individual’s domicile is outside the UK and does not prevent HMRC from later opening an enquiry to consider the domicile status of the individual in relation to that, or any earlier year. “
It is now more important than ever that adequate disclosure is made on the Self Assessment Tax Return to ensure a fighting chance against any challenge by HMRC.
HMRC have promised more detailed guidance “soon” – watch this space
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Comments (2) Read through and enter the discussion with the form at the end
HMRC are remarkable. An attempt here to persuade taxpayers that they will have acquired a domicile of choice simply because they have been here a while, married and settled down.
If it is so easy to acquire a new domicile, then presumably it will be as easy to lose. Could we have taxpayers changing their minds each year, and what do they mean by "permanent home" - that is open to much interpretation.
Simon
Much of the guidance is at best a summary of the position and certainly should not be taken at face value without seeking professional advice.
Thanks
Barry