Compliance And Anti-Avoidance

Changes To The Remittance Basis

Individuals not domiciled or not ordinarily resident in the UK are currently taxed on overseas income and capital gains only at the time of remittance to the UK.

From April 2008:

• After being resident in the UK for seven years, individuals will have the choice of paying tax on their worldwide income and gains or an annual £30,000 of tax over and above that payable on the remittance basis.
• Days of arrival in and departure from the UK will be included as days ‘in’ the UK in establishing whether or not an individual is resident in the UK for tax purposes.
• Unless unremitted foreign income is less than £1,000 a year, those claiming the remittance basis will lose their entitlement to UK personal income tax allowances.

Further technical measures will reduce opportunities for those taxable on the remittance basis to, for example, alienate income or gains, or convert income and gains into non-taxable funds.

Remittance basis for income from Irish investments and employers.

Historically the income arising to UK resident non-domiciliaries from investment in the Republic and from employers resident there has been taxable as it arises.

From 6 April 2008 the general remittance basis (as outlined above) will apply to such income.