Budget 2011 - In Britain to stay?
There has been much speculation as to how the special rules for taxing non-doms might change. On Budget Day we found out – at least for this parliament.
The good news for non-doms is that they will be able to remit income and/or capital gains tax free for the purpose of commercial investment in UK businesses. This effectively gives up to 50% tax relief on the amounts remitted. We await the outcome of consultation to establish what investments will qualify but in general this is good news for those who want to invest in the UK.
Outside the world of tax, there is further good news for individuals who want to settle in the UK. Only a week ago, the Border Agency also announced a relaxation of the immigration requirements to attract foreign investors and entrepreneurs to the UK. The changes mean that those with significant wealth to bring to the UK will be given a fast track to settlement in the UK. For example, those with £10 million to invest can settle in the UK after only 2 years. Previously, they would have had to wait at least 5 years to apply to settle in this country.
Of course, residence for tax purposes and residence for immigration purposes are not necessarily the same and have to be considered separately. Following a number of tax cases in relation to residence, the Government have finally announced a long-awaited statutory residence test and there will be consultation on this, too, over the summer with a view to implementation from April 2012.
The not-so-good news is that there is a proposed increase to the charge some non-doms need to pay in order to access the remittance basis. Currently, those non-doms who have been here for 7 out of the previous 9 tax years have had to pay an annual £30,000 charge in order to benefit from of the remittance basis. From April 2012, those who have lived in the UK for 12 years will have to pay £50,000 per year instead.
Finally, we have been promised some simplification of the technical rules on remittances but we must, once more, wait for further details to be released.
The big message is, though, that non-doms are welcome in Britain.
Date: 29th March, 2011
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