Lord Ashcroft - tax domicile, the latest instalment (or the wisdom of seeking advice early)

Posted on September 27, 2010 by Lisa Spearman

I am pleased to see that Lord Ashcroft follows the advice in Tax Plus blog – readers of my post of 13 July may recall that I mentioned then that careful planning could avoid the worst impacts of a change of tax domicile. The BBC today reports that this is precisely what was done. 

Without expressing an opinion on Lord Ashcroft’s actions, it is clear that the key to successful tax planning is forward planning and we would encourage anyone anticipating a change in circumstances to seek advice sooner rather than later.

Lisa Spearman is a partner at Mercer & Hole. If you would like to discuss the contents of this post with Lisa you can call her on 020 7353 1597.

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CIOT draws attention to hidden penalty in new tax rules

Posted on December 10, 2007 by Lisa Spearman
The Chartered Institute of Taxation has highlighted the fact that a Private Members’ Bill (Disqualification from Parliament (Taxation Status) Bill) has been tabled in Parliament which proposes that those electing for the non-domiciled remittance basis of taxation will be disqualified from acting as an MP or Member of the House of Lords.

John Whiting, Chairman of the CIOT’s Management of Taxes Committee, says:

“One can understand the driving force at work here but there is also an important matter of tax principle. A taxpayer will, under the proposed non-domiciled rules, be given an option over two bases of taxation. Yet someone choosing one route is, seemingly, to be handed an extra penalty. It does seem a bad precedent if making what might be regarded as the wrong tax choice attracts adverse treatment in another area.”

This is an odd choice of words – by electing for the remittance basis it is likely that the tax bill will be reduced so this could hardly be an extra penalty!

It should be noted that this bill, like most Private Members’ Bills is unlikely to become law

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Non-Doms - Consultative Document Published

Posted on December 6, 2007 by Lisa Spearman
Having indicated that the promised consultative document on Residence and Domicile would not be issued until the New Year it was surprising to see it appear on the Treasury website this morning.

In many ways it doesn’t take us much further forward as there are still many proposals and no draft legislation. The highlights are:

  • Non-doms who are resident for 7 out 10 years will have to pay a £30,000 levy each year to retain the remittance basis and they will lose personal allowances and capital gains annual exemptions.
  • Those who are resident for 10 out of 12 years will have an increased levy of £50,000 a year. 
  • Those who are resident for 17 out of 20 years will be deemed UK domicile and lose the possibility of the remittance basis altogether.

This last proposal will have a significant impact on many long term UK resident Non-doms. It should be noted that this is Government thinking at present not fixed proposals.

Watch this space for further news.

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