HN8 - Letter from the Acting Chairman of HM Revenue & Customs regarding the tax changes relating to UK non-domiciles due to come into effect on 6th April 2008

A letter dated 12 February 2008 has been sent to tax advisers. The letter states that the British Government recognises the positive contribution made by the remittance basis of taxation to UK competitiveness and is committed to retaining it.

The letter goes on to confirm that the Government’s intention has always been to ensure that:

• Those paying UK tax on all remittances to the UK (and paying the £30,000 per annum), will not be required to make any additional disclosures about their non-UK sources of income and gains.
  
  
• There will be no retrospection in the treatment of trusts – the changes will not apply to gains accrued or realised prior to 6 April 2008.
  
  
• Money brought into the UK to pay the £30,000 annual fee will not itself be taxable.
  
  
• Works of art can still be brought into the UK for public display without incurring a tax liability.

Discussions are continuing with the US authorities as to how the £30,000 annual fee can be credited against US tax.

It would appear that Alistair Darling has to some extent listened to the pressure exerted by the city and other sources. He has made some changes to his proposed future taxation of non-domiciles in the UK. Much of the detail has yet to be published. It is hoped that this will become clearer at the time of the budget on 12 March 2008.

Watch this space.

joe.dunne@dixcart.com