Who are Non Domiciled?
Non Doms are generally foreign born UK tax residents. Many Non Domiciled people are now also UK citizens. Sometimes a tax payer can be a Non Dom because his or her father was born outside the UK so long as the sibling has strong links to the father’s country of birth. The test to determine who is non domicile and who is not can become quite complex but the criteria above is a general rule.
What are the Tax Benefits of Being Non Domiciled?
In short, any foreign income generated by a non domiciled resident, so long as it is not remitted back to the UK is exempt from UK tax. Foreign income left abroad is not taxed but foreign income remitted to the UK is taxed along with all other UK sourced income. This is referred to as claiming “The Remittance Basis” for income tax purposes. Any remitted foreign income to the UK tax system is classified as being subjected to tax on the “Arising Basis”. However recent legislation has now altered this situation for non domicile residents slightly with the imposition of new laws but non domicile tax benefits are still very attractive.
Being a Non Dom in the UK is still a very useful tool for tax planning purposes and can save you huge amounts of tax. Another area where your Non Domiciled tax status can save you significant amounts of tax is with the use of trusts. The recent legislation means that since 2008 a Non Domicile is liable for a £30,000 charge on his or her foreign income, regardless of size, if the Non dom has been resident in the UK for 7 out of the last 9 tax years so at this point most just remit their foreign income to the UK. This fee has now increased to £60,000 if the Non Domiciled UK resident has been in the UK for longer than 9 years out of the last 12 years and further rising to £90,000 if the UK resident has been in the UK for 17 of the last 20 years.
For further information about Non Domicile tax advantages you can read the tax guide shown below “Tax Saving Tactics of Non Doms” or you can click on this link for an explanation by the HMRC. You can also call The Tax Experts to work out what to do with your remitted foreign income or un-remitted income and how to maximise the benefits of your unique tax status.
If you would like to learn how to maximise your Non Domicled tax status for massive tax savings, contact us here through our request-a-callback form. You can also email us at email@example.com or call us on 0845 052 3787.
Why learn about your Non Domicile Tax Status?
To save time and money when using any consultant it is smart to get a thorough grounding in your non domiciled tax status. This is so that your money is not wasted on long-winded explanations and so you know the right questions to ask about your non domicile tax status and how it can effectively increase your income through saving on income tax, capital gains tax, and inheritance tax. To assist you with learning about your unique non dom status and other taxation strategies to save tax we suggest you explore the tax guide that best suits your interests. Our tax guides will assist you in determining whether your foreign income should be remitted to the UK and pay the tax on the arising basis or be whether it should be left abroad. You can review all our up-to-date tax guides, about avoiding various types of tax, by visiting our book shop.
Some guides that apply to your non domicile tax status are shown below. For more information on the respective guide, just click on the picture.