The latest Non Dom changes: Are you upto speed?

25 January 2017

Speed read

  • PwC's Olivia Sullivan was interviewed recently for the LexisNexis Private Client hot topic series
  • In this video Olivia shares her thoughts on what the changes to the taxation of non-doms will mean and their impact.
  • Our previous summary of the changes is included below


The window of opportunity for non doms to tidy up or 'cleanse' - their offshore bank accounts containing mixed funds will now be open for two tax years (rather than one) starting on 6 April 2017.

The opportunity for those becoming deemed domiciled in April 2017 to rebase their non-UK assets to their 6 April 2017 value will be limited to personally held assets only. It does not extend to assets held in trust or to gains which are subject to income tax, e.g. offshore income gains. In order to qualify for rebasing, an asset must have been held offshore from 16 March 2016 - 5 April 2017 or from a later date (if acquired after 16 March 2017) to 5 April 2017.

HMT have confirmed that, in line with the current position, an individual leaving the UK will cease to be deemed domiciled for inheritance tax purposes only at the start of their 4th year of non residence.


The government has made significant changes to the proposals put forward in its August 2016 consultation document. The broad intention is that, unless further additions are made to the trust, a liability to income tax or capital gains tax will only arise where payments or benefits are received from the trust. Merely making a payment from the trust will not result in a loss of protection going forward.

A number of anti-avoidance provisions will be introduced in order to counter perceived opportunities for tax avoidance.

Only partial legislation in relation to the trust changes has been published. Provisions relating to the income tax treatment of trusts going forward has yet to be released.

Residential Property

As previously announced, offshore structures holding UK residential property will be looked through for IHT purposes. However, rather than disallowing connected party loans in calculating the value of the UK residential property for IHT, the government intends to treat any loans taken out in order to acquire or maintain a UK residential property as being within the charge to IHT in the hands of the lender instead.

Business Investment Relief

The government wishes to broaden and simplify the criteria for BIR. They are still considering opportunities to do this.

For now they have introduced a 'hybrid' company category to the investment company definitions. This will mean that a company that is both a trading and stakeholder company will be able to attract BIR. In addition, the time limit for investing before a qualifying company starts to trade increased from 2 to 5 years.

The draft legislation seen to date does not cover all aspects of the non dom changes, with the remaining legislation promised by the date of the publication of the Finance Bill, expected in March 2017. We will continue to make representations as to the difficulties that this truncated timescale creates.

For more information please contact your usual PwC contact or get in touch with Olivia O'Sullivan on 020 7213 8524 / Email:



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