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Reforms to the taxation of non-domiciles

The existing inheritance tax (IHT) deemed domicile provisions for individuals are to be aligned with the proposed changes for income tax and capital gains tax. This will mean that an individual will become deemed domiciled for IHT purposes if they have been resident in at least fifteen of the previous twenty tax years (the 'long-term residence rule'). 

In addition, individuals born in the UK with a UK domicile of origin at birth who subsequently acquire a domicile of choice elsewhere will be deemed domiciled for IHT purposes whilst they are resident in the UK, provided they were resident in at least one of the previous two tax years ('returning UK domiciles').

Overseas property settled into trust by returning UK domiciles while they were domiciled elsewhere will also be subject to IHT once the individual has been resident in the UK in at least one of the previous two tax years. However, once the individual leaves the UK and ceases to meet the residence conditions, that trust property will be excluded for IHT purposes. These changes will apply from 6 April 2017. 

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Added By: Luke Noble on 21st Mar 2016 - 17:02
Last Updated: 22nd Mar 2016 - 13:36

Number of Views: 1149
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