Many of my clients are ‘res non-doms’. This particular category of taxpayer is once again back in the court of public opinion following the furore over the tax affairs of Rishi Sunak’s wife. Within this category, much of my time is spent advising on the 2017 and 2018 extension of the deemed domicile rules and the new rules on ‘protected settlements’.
Despite the immigration challenges posed by Brexit and the withdrawal of the Tier 1 investor visa, I am still seeing a number of individuals looking to move to the UK and therefore needing our assistance with pre-arrival planning. This is my favourite time of year for such enquiries as we still have plenty of time to plan for the start of the next tax year. I do not enjoy the same enquiries in March!
A large part of my practice involves advising on the UK taxation of high value residential property. After a period of near constant change to the rules from 2012 to 2019, the only major upcoming changes that I am currently aware of are in relation to SDLT and the rules for multiple dwellings relief and mixed use property. The current focus for many of my clients has switched from tax to beneficial ownership reporting requirements, including those for trusts and overseas companies.
What do you know now that you wish you’d known at the start of your career?
It is perhaps a good thing that I did not realise exactly how quickly and extensively tax law can change…
Has a recent tax case caught your eye?
There have been two recent cases on tax residence of particular interest.
Oppenheimer [2022] UKFTT 112 (TC) is a relatively rare example of a case that gives detailed analysis of the way that the tiebreaker test in double tax treaties should be approached.
On the subject of the statutory residence test, the FTT has taken a far wider view of the ‘exceptional circumstances’ exemption than HMRC in Taxpayer v HMRC [2022] UKFTT 133 (TC).
What issues have clients been raising recently?
Domicile continues to be an important area. In recent years, there has been a major shift in HMRC’s approach, which has resulted in an increasing number of domicile enquiries.
There is a temptation for individuals who are now ‘deemed domiciled’ for tax purposes to lose sight of the continuing importance of domicile as a matter of the common law. This is particularly important for protected settlements that only qualify for this special tax status if the settlor does not have a UK common law domicile.
Similarly, I sometimes come across individuals who fixate on the 15/20 rule, neglecting the fact that an intention to reside ‘permanently or indefinitely’ will cause them to acquire a domicile of choice and render the deemed domicile rules irrelevant.
Some non-domiciled individuals chose to cease UK tax residence before 6 April 2017 in order to avoid becoming deemed domiciled for income tax and capital gains tax purposes under the new 15/20 year rule. 5 April 2023 will mark the completion of six tax years of non-residence for such individuals, which theoretically gives rise to the ability to resume UK tax residence and take advantage of the remittance basis for a further 15 years. However, we anticipate that HMRC will closely scrutinise the common law domicile of individuals returning to the UK on this basis.
It is also important to keep in mind that the common law of domicile is not only relevant to tax. It also governs the applicability of English law to various personal matters, including succession to moveable assets, jurisdiction to hear claims for financial provision on death and jurisdiction to hear matrimonial proceedings. Many cases concerning domicile are in these areas, rather than tax.
And finally, you might not know this about me but...
I am a farmer’s daughter, born and raised in rural Shropshire.
Many of my clients are ‘res non-doms’. This particular category of taxpayer is once again back in the court of public opinion following the furore over the tax affairs of Rishi Sunak’s wife. Within this category, much of my time is spent advising on the 2017 and 2018 extension of the deemed domicile rules and the new rules on ‘protected settlements’.
Despite the immigration challenges posed by Brexit and the withdrawal of the Tier 1 investor visa, I am still seeing a number of individuals looking to move to the UK and therefore needing our assistance with pre-arrival planning. This is my favourite time of year for such enquiries as we still have plenty of time to plan for the start of the next tax year. I do not enjoy the same enquiries in March!
A large part of my practice involves advising on the UK taxation of high value residential property. After a period of near constant change to the rules from 2012 to 2019, the only major upcoming changes that I am currently aware of are in relation to SDLT and the rules for multiple dwellings relief and mixed use property. The current focus for many of my clients has switched from tax to beneficial ownership reporting requirements, including those for trusts and overseas companies.
What do you know now that you wish you’d known at the start of your career?
It is perhaps a good thing that I did not realise exactly how quickly and extensively tax law can change…
Has a recent tax case caught your eye?
There have been two recent cases on tax residence of particular interest.
Oppenheimer [2022] UKFTT 112 (TC) is a relatively rare example of a case that gives detailed analysis of the way that the tiebreaker test in double tax treaties should be approached.
On the subject of the statutory residence test, the FTT has taken a far wider view of the ‘exceptional circumstances’ exemption than HMRC in Taxpayer v HMRC [2022] UKFTT 133 (TC).
What issues have clients been raising recently?
Domicile continues to be an important area. In recent years, there has been a major shift in HMRC’s approach, which has resulted in an increasing number of domicile enquiries.
There is a temptation for individuals who are now ‘deemed domiciled’ for tax purposes to lose sight of the continuing importance of domicile as a matter of the common law. This is particularly important for protected settlements that only qualify for this special tax status if the settlor does not have a UK common law domicile.
Similarly, I sometimes come across individuals who fixate on the 15/20 rule, neglecting the fact that an intention to reside ‘permanently or indefinitely’ will cause them to acquire a domicile of choice and render the deemed domicile rules irrelevant.
Some non-domiciled individuals chose to cease UK tax residence before 6 April 2017 in order to avoid becoming deemed domiciled for income tax and capital gains tax purposes under the new 15/20 year rule. 5 April 2023 will mark the completion of six tax years of non-residence for such individuals, which theoretically gives rise to the ability to resume UK tax residence and take advantage of the remittance basis for a further 15 years. However, we anticipate that HMRC will closely scrutinise the common law domicile of individuals returning to the UK on this basis.
It is also important to keep in mind that the common law of domicile is not only relevant to tax. It also governs the applicability of English law to various personal matters, including succession to moveable assets, jurisdiction to hear claims for financial provision on death and jurisdiction to hear matrimonial proceedings. Many cases concerning domicile are in these areas, rather than tax.
And finally, you might not know this about me but...
I am a farmer’s daughter, born and raised in rural Shropshire.
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