Posted by Nick Day on 27 Apr 2017
Finance Bill 2017 Update!
Several widely trumpeted tax measures that were going to be introduced by the Government have belatedly been withdrawn from the draft 2017 Finance Bill.
Measures apparently dropped and/or postponed include “Making Tax Digital” reporting for self-employed businesses/property landlords, wide-ranging changes to the rules for non-domiciled individuals and new Inheritance Tax proposals for UK residential properties.
The regime for the UK taxation of non-domiciled individuals was due to alter fundamentally from 6 April 2017. For example, deemed UK domicile status was to be introduced for those non-doms who were tax resident in 15 of the previous 20 tax years, the re-basing of foreign asset costs for UK capital gains tax purposes was going to be allowed in certain cases and there was to be a one-off “clean up” remittance planning opportunity for non-doms to reorganise their offshore funds in to constituent parts of taxable income/gain and clean tax-free capital.
Although the Government has said that its policy in these areas has not altered it remains to be seen whether these proposed laws will be re-introduced and of course, a change of Government in the upcoming UK General Election cannot be discounted, meaning policy might change completely. It is also not known when any new legislation would apply from. It might be that the new laws are postponed for a year but there is the possibility that the laws when eventually passed could be retrospectively applied from 6 April 2017 or some other date.
We will provide updates where possible via our website but we feel it is unlikely that the Government will comment in any detail until after the General Election.
In the meantime, if you are a non-domiciled individual and would like to discuss your options in light of this news please let us know.
Foreign Pensions – Lump Sums
A late change has also been made to the rules for taxing foreign pension lump sums.
Law was going to be introduced which taxed UK tax residents on lump sums from foreign pension schemes in full from 6 April 2017 onwards, but it now appears as though the tax-free treatment that existed where “foreign service relief” was due before 6 April 2017 will be preserved, or “grandfathered”. This means that those individuals with non-UK pension pots that built up during non-resident periods spent working abroad before 6 April 2017 could still receive tax-free lump sum payments depending on their circumstances.
If you hold such non-UK pension entitlements please do not hesitate to contact us to discuss your circumstances.
If you would like any advice regarding the finance bill updates or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or firstname.lastname@example.org.