An individual who is resident in the UK but is not UK domiciled (referred to as a ‘non-dom’) may choose to be taxed on the ‘remittance basis’. This means that instead of being taxed on their actual income/gains, they are taxed on the amount of that income/gains brought into the UK in a tax year.
Non-UK income/gains are taxable on the arising basis for non-doms just as they are for any UK domiciled individual; however a non-dom can make a claim for the remittance basis to apply. In doing so, they will forfeit their income tax personal allowance and their annual exemption for capital gains tax.
Where an individual has been resident in the UK for at least seven out of the nine UK tax years preceding the one for which liability is being considered, they are considered long term resident and more complex rules apply. In the case of individuals who have been resident in the UK for 12 out of the last 14 tax years, a higher Remittance Basis Charge applies which is currently £60k.
Some individuals who are not domiciled in the UK may still be deemed to be UK domiciled in certain circumstances and in those cases, the remittance basis is not available.
The remittance basis rules are detailed and complex and it is therefore important to seek advice regarding your specific circumstances. Please contact us to find out how we can help.