Autumn Budget 2025: International Tax for Individuals

International Tax for Individuals Transcript

Host: Hi there. Welcome to the Mercer Home budget update. I’m now joined by Liz Cuthbertson, one of our tax partners who specializes in international tax matters.

Host: So I was interesting budget today. Liz, do you wanna go through some of the aspects that affected some of our, uh, tax taxpayers?

Liz: So I think today’s budget was probably quieter than many of us were expecting. However, we shouldn’t underestimate the impact of some of the rules that we already have in force.

Liz: And one of those is of course, that from the 6th of April, 2025, anyone who is already resident in the UK for four years or more is subject to UK tax on their worldwide income gains with credit for foreign taxes where the credit is available.

Liz: And so that will mean that many taxpayers are going to be paying more tax in the UK ahead, and the burden of establishing that tax charge will be higher.

Liz: So the key is prepare early, make sure you know what your sources of income and gains are and whether you have available credits in other countries. And obviously taking advice in the UK and in the other countries is going to be important.

Host: Yeah. And then obviously if the tax burden is rising, are there any, incentives or reliefs that are available for these investors?

Liz: Potentially there are. And the good news today is the chancellor has announced, further investment opportunity into UK enterprise, which is good news, extension of investment through the SEIS and VCT schemes.

Liz: And these will be hopefully opportunities for clients to invest into UK businesses, growing businesses and established businesses and perhaps obtain some tax relief.

Host: Uh, and what about, the non do on the non-UK resident, taxpayers, what changes, um, might they be interested in now?

Liz: Well, we have seen some flight of high value clients, leaving the UK, wealthy individuals who have left the UK in response to the new tax regime.

Liz: But there is some good news because today the chancellor announced a cap of 5 billion pounds for a tax charge on the trust for an excluded property trust.

Liz: That is a trust that was set up before budget day October, 2024 by a non-dom and is excluded from UK inheritance tax. That is some good news.

Liz: I think the, the other point that is worth, mentioning is for those clients who have left the UK and are non-UK residents, the UK still has a framework around temporary non-residents.

Liz: And these rules are very important because if somebody returns before they have left the UK temping non-residents period, they may suffer UK tax on income and gains they received in the period of non-UK residents.

Liz: And today the chancellor made an announcement that all dividends will be within the scope of TNR regardless of whether the distribution is out of pre or post departure profits.

Liz: So that is an area of risk and anyone who is non-resident and has recently left really important that they review their residents position every year check because the devil is in the detail.

Host: Oh, thank you very much Liz.