The ATT broadly supports the proposed removal of the remittance basis, welcoming the clarity and certainty for non-doms around moving more generally to the statutory residence test. Acknowledging that the proposed changes have not yet been set out in draft legislation, the ATT sets out several key concerns, based on the Government’s most recent policy paper:
the four-year Foreign Income and Gains (FIG) exemption appears only to be available to new arrivals with no history of UK residence in the previous 10 years, which risks discouraging short-term residence in the UK, for example for fixed-term contracts;
individuals would become liable to UK IHT on their overseas assets after 10 years of UK residence, but it is not clear whether this means 10 consecutive years - the Association suggests the test should instead be based on 10 years of UK residence in the previous 15 years; and
the proposed 10-year ‘tail period’ during which individuals would remain liable to UK IHT on their overseas assets is significantly longer than under the current rules - a tapering period, based on the number of years the individual has been UK resident would help mitigate against discouraging people from moving to the UK (for fear of long-term future UK IHT exposure).
The full response is worth reading for the various points drawn out, including potential confusion around how overseas workday relief will operate.
The ATT broadly supports the proposed removal of the remittance basis, welcoming the clarity and certainty for non-doms around moving more generally to the statutory residence test. Acknowledging that the proposed changes have not yet been set out in draft legislation, the ATT sets out several key concerns, based on the Government’s most recent policy paper:
the four-year Foreign Income and Gains (FIG) exemption appears only to be available to new arrivals with no history of UK residence in the previous 10 years, which risks discouraging short-term residence in the UK, for example for fixed-term contracts;
individuals would become liable to UK IHT on their overseas assets after 10 years of UK residence, but it is not clear whether this means 10 consecutive years - the Association suggests the test should instead be based on 10 years of UK residence in the previous 15 years; and
the proposed 10-year ‘tail period’ during which individuals would remain liable to UK IHT on their overseas assets is significantly longer than under the current rules - a tapering period, based on the number of years the individual has been UK resident would help mitigate against discouraging people from moving to the UK (for fear of long-term future UK IHT exposure).
The full response is worth reading for the various points drawn out, including potential confusion around how overseas workday relief will operate.
