Non-domiciliaries: Government wriggles

Posted by admin at 15:51 on 13 Feb 2017

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The 2008 Finance Bill introduced a new regime whereby persons not domiciled in this country could choose between declaring their entire worldwide income for UK tax purposes, or paying a special £30,000 charge plus tax on any amounts remitted to the UK (the "remittance basis"). As originally drafted, however, this did not apply to share scheme benefits arising offshore, which would continue to be subject to UK income tax and NIC.

In amendments tabled on 6th June 2008, the Government now proposes that, if the non-domiciled UK tax payer elects for the remittance basis, any offshore share scheme gains will be taxed only if remitted. However, it has not backed down on the question of NIC contributions on offshore share option gains. HM Revenue & Customs also believes that, based on current drafting, all offshore gains arising on UK shares will be deemed to be automatically remitted to the UK for tax purposes whether or not the employee wishes to do so.

This situation is clearly unsatisfactory, so we expect another government announcement before the Finance Bill receives Royal Assent (now expected between 18th July and 5th August 2008.)