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Snap Election

A dramatic Election U turn from the Prime Minister this morning – no doubt she has been taking lessons from Mr Hammond and a few others besides!


Whilst the announcement does not per se have any particular or direct relevance for the tax profession given recent events, and the looming Brexit negotiations, a few thoughts spring to mind:


  • Will this adversely affect any tax initiatives which are at an early stage – consultations, reviews and so forth;
  • Might HMRC use the cover of the Election hullaballoo to sneak out some unwelcome measures;
  • Could we have some interesting manifesto pledges which might give the incoming government a little more latitude so that Mr Hammond, if indeed he is the Chancellor after the Election, can push on without needing to worry about manifesto pledges;
  • How will any pledges affect the stratification of the tax paying public between those who have and those who have not;
  • Could there be some welcome ‘white rabbits’ in the manifestos – a more realistic time scale for Making Tax Digital, a lightening of the tax burden for the squeezed middle, some real incentives for business for instance; and
  • Will there be a rush to execute financial transactions in the fear that certain tax rules may change. There could of course be a push to delay if tax breaks are promised.


One thing I can state for certain is that it will be some time before there is clarity and certainty with regard to the future direction of the tax code in the UK. In the absence of this I and many other tax advisers will be treading very carefully when giving forward looking tax advice to clients in the coming months.


For help or advice on tax matters for you or your business, contact us on 0121 633 2000 or click here to send an email.


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The UK's tax system for individuals classed as "not UK domiciled" (often called "non-doms") is undergoing a significant overhaul. This system has traditionally offered tax advantages for foreign income and gains, but those benefits are coming to an end. Non-domiciled individuals are generally those who haven't established strong ties to the UK in terms of residence or family connections. Previously, they enjoyed a tax perk known as the "remittance basis of taxation." This allowed them to avoid paying UK income tax on foreign income and capital gains, as long as the money remained outside the UK. However, these advantages have been gradually restricted in recent years. The new reforms, announced by the Chancellor of the Exchequer – Jeremy Hunt, represent a change to the existing non-dom tax system. The New System - What Does it Mean Non-Doms in the Future? Starting April 6th, 2025, a new system will be in effect. Here's what it entails for non-domiciled individuals who become UK resident after that date: Temporary Tax Exemption: If you haven't been a UK resident in the past 10 years and become one after the reform, you'll benefit from a temporary tax exemption. This means your foreign income and gains will be exempt from UK income tax for the first four years of your UK residency. Standard Taxation After Four Years: After the initial four-year grace period, your foreign income and gains will be taxed on the same basis as other UK residents. To avoid double taxation, relief will be available against UK tax under Double Tax treaties or the Unilateral system for any foreign tax already paid. What about Existing Non-Doms? The government acknowledges the complexities of transition for current non-dom who are UK residents. Transitional rules are being considered to ease the shift. These may include: Reduced Tax Rate for Bringing Foreign Income to UK: Existing non-doms might be offered an opportunity to bring previously untaxed foreign income and gains back to the UK at a reduced tax rate. Rebasing Foreign Assets for Capital Gains: There's also a possibility of "rebasing" the value of non-domiciled individuals' foreign assets for capital gains tax purposes. This could mean using the asset value in 2019 as a baseline, potentially reducing their future capital gains tax liability. Uncertainties and Taking Action The details of the new system and the transitional rules are still under development. The full picture will become clearer when the government publishes further consultations later in the year. Given the complexities involved, it's crucial for individuals who might be affected by these reforms to seek professional tax advice. Understanding the opportunities and potential pitfalls of the new system can help you make informed decisions about your financial future. While the non-dom tax reform simplifies matters to a certain extent, it introduces new considerations for individuals with international finances. Staying informed and seeking professional guidance will be key to navigating these changes effectively.

Friend Partnership is a forward-thinking firm of Chartered Accountants, Business Advisers, Corporate Finance and Tax Specialists, based In The UK

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