Domicile and Residence

In the pre-budget report on 9 October 2007, the Chancellor announced a review of the residence and domicile rules which are currently in operation.

 

Currently, a person’s residence position is decided by the number of days spent in the UK but in calculating the number of days for deciding residence status, arrival and departure days are excluded. 

 

If an individual is a UK resident but non-UK domiciled, they will be taxable only on income and Capital Gains arising in the UK, and on income and Capital Gains arising elsewhere in the world for which the income or proceeds have been brought into the UK (the “remittance basis”). 

 

The pre-budget report statement indicates that legislation will be enacted, effective 6 April 2008, to introduce an additional tax charge of £30,000 per annum for those individuals who wish to continue claiming the remittance basis. In addition, the automatic entitlement to a personal allowance will also be addressed, along with the inclusion of arrival and departure days for the determination of residence. Certain other anomolies will also be addressed at this time.

 

A consultation will take place on the detail of the proposed legislation.

 

If you have any questions in connection with the 2007 Pre Budget Report in general, or this specific matter, please contact David Buck or David Nash at Chancery.