Summary of the Finance Act 2008 Changes to the Residence and Domicile Rules
- Most individuals who are entitled to use the remittance basis of taxation now need to make an annual claim to do so.
- Individuals claiming the remittance basis of taxation, where they have unremitted foreign income or gains of £2,000 or more arising in the tax year, lose their entitlement to personal allowances and the annual exempt amount for capital gains tax.
- The introduction of an annual £30,000 tax charge for adult remittance basis users resident in the UK in the current year and for 7 or more of the previous 9 years where they have unremitted foreign income or gains of £2,000 or more in the current year.
- Changing the day counting rules that determine when someone becomes resident in the UK under the 183-day rule to count as a day any day upon which an individual is in the UK at the end of that day (i.e. at midnight), subject to a new rule for transit passengers.
- Closure of a number of loopholes and flaws in the remittance basis that allowed people to bring untaxed income or gains into the UK tax free.
Source: HMRC. www.hmrc.gov.uk. Copyright Acknowledged.