Announcement of a major change to the law concerning “non-domiciled” residents by the British Government
The announcement of a major change to the law concerning “non-domiciled” residents by the British Government will likely require reviewing tax status over the coming months. From April 2017, all individuals that have resided in the UK for more than 15 of the past 20 years will be deemed domiciled in the UK. The immediate consequence of the new regime will be to deprive these taxpayers of the remittance basis regime (i.e. the imposition of UK tax limited to UK sourced income and income repatriated to the UK), and eventually expose worldwide assets to UK inheritance tax. In practice, this means that from the 16th year of residence (the law being applied retroactively, as the 15 year condition will apply immediately) and in accordance with the ordinary law applicable to UK residents, income will be taxable when generated, regardless of its source or where it is received (i.e. the arising basis regime will apply). Our offices, located in Monaco and Geneva, have advised high net worth individuals and “citizens of the world” on their patrimonial projects for many years. It is in this context that we have often recommended to our clients to settle in the UK. Following this reform, we consider that Monaco and Switzerland offer solid alternatives to a number of British taxpayers who will soon no longer be in a position to benefit from the resident non-domiciled regime. Each of these jurisdictions offers different opportunities, depending on the nationality, professional activities and particular circumstances of the individuals concerned. Based on our experience, we are well positioned to consider and compare these opportunities.