Extracted from Grant Thornton UK (April 2009)
In an acknowledgement of the complexity of the rules that were introduced for non-domiciled (non-doms) and not ordinarily resident individuals in 2008, the Government has had to back down on its commitment not to revisit the tax rules in the current and next parliamentary term. Today’s measures include:
Removal of the filing obligation for certain groups
The obligation to file a self assessment return where individuals have overseas employment income of less than £10,000 and overseas bank interest of less than £100 in any tax year, all of which is subject to a foreign tax a return will be removed with effect from 6 April 2008.
Exempt assets
Exemptions are extended to allow property purchased out of foreign employment income and foreign chargeable gains as well as relevant foreign income with effect from 6 April 2008.
Gift aid donations
Finance Bill 2009 will amend the remittance basis rules to ensure that non doms that pay the £30,000 remittance basis charge will have this charge treated in the same way as other types of income tax or capital gains for the purposes of Gift Aid with effect from 6 April 2008.
The Chancellor announced in last year’s Budget that foreign individuals who have been living in Britain for seven or more tax years will pay tax on their offshore income and gains kept outside of the UK unless they pay a £30,000 annual ‘remittance basis charge’. If they have lived in the UK for fewer than seven years, they only have to pay UK tax on foreign income and gains when these are remitted into the UK.
Chris Mills, director at Grant Thornton says, “These ‘minor’ amendments will in the main help to clarify the rules, but are an admission of the complexity created last year. Many of these amendments have been backdated to April 2008 when the original legislation became effective. This shows what happens when legislation is conceived, drafted and introduced too quickly.”