Nom-dom update: Finance Bill 2017

In a further twist in the ongoing story of the proposed changes to the tax treatment of non-domiciled individuals, the trusts with which they are connected and UK residential property, the Government has omitted the provisions to effect these reforms from the Finance Bill 2017, which was rushed through the House of Commons earlier in the week.  This comes after two years of consultation and debate over the reforms, the publication of draft legislation and the announcement at last month's Spring Budget that the Government would legislate to introduce the changes with effect from 6 April 2017.

By way of recap, these provisions include:

• the proposal that a non-domiciled individual who has been resident in the UK for at least 15 out of the previous 20 tax years will become UK-domiciled for all tax purposes;
• the proposal that an individual with a UK domicile of origin will become UK-domiciled for all tax purposes while they are resident in the UK;
• the rebasing and cleansing reliefs available for non-domiciled individuals;
• the proposal that UK residential property held by non-domiciled individuals and certain trusts through a non-UK resident company will fall within the UK inheritance tax net;
• the proposal that loans, guarantees and security relating to the acquisition or maintenance of UK residential property fall within the UK inheritance net in the hands of the lender, guarantor or security provider; and
• the proposed changes to settlements established by non-domiciled individuals.

For more detail on the reforms, please visit our website to see our briefing notes.

Many individuals and trustees who would have been affected by the new legislation will have already taken steps to restructure their affairs to factor in the reforms.  However, for those who have yet to act, it may now be that they have more time to restructure their affairs.

Frustratingly, it is very much a question of watching this space as it is unclear as to:

whether the reforms will be introduced at all; and
if the changes are introduced, whether they will be backdated to have effect from 6 April 2017, as originally announced.

In the meantime, if you require any advice as to what action, if any, you should be taking please get in touch with your usual contact at Wilsons.