STEP hosted the last in this autumn’s series of Annual Tax Conferences on 21 October in London. Some outstanding STEP members spoke on topical matters including John Barnett TEP, Emma Chamberlain TEP, Robert Jamieson TEP, Edward Stone TEP, Paula Tallon and Chris Whitehouse TEP.

Emma Chamberlain provided a much needed update on deemed domiciliaries – the basic rules and transitional provisions. She raised some pertinent points on the rules of deemed UK domicile for long term UK residents, such as:

• A taxpayer resident in the UK for 15 out of 20 years will be deemed domiciled for all tax purposes. The individual could also become deemed domiciled in a year when not UK resident, for example, if they moved abroad in their 16th year.
• Split years count as years of UK residence and count even when the person is a minor.
• If a taxpayer arrived here in 2002/3 or earlier and has been resident ever since, he or she will become deemed domiciled on 6 April 2017.
• Once deemed domiciled a taxpayer must spend six tax years abroad to lose deemed domiciled status for income tax and capital gains tax purposes.

Emma went on to explain that the deemed domiciled status can be lost if the taxpayer leaves the UK by April 2018 and is non-resident for six consecutive years. The status will fall away at the start of 2024/25.

If that individual returned in May 2024 he or she would not be deemed domiciled again until 2039/40 after another 15 years of residence.

Emma suggested that the individual in question might be able to retain foreign domicile under general law, but nothing is certain at this stage. In any event, it seems very likely that domicile queries would be raised by HMRC and we strongly suggest that clients and advisors keep accurate domicile records.

STEP has recently submitted responses to HMRC’s reforms to the taxation of non-domiciles consultation paper dated 19 August 2016 which can be found on the STEP consultation tracker:

• Consultation tracker
• April 2017 changes to the UK’s taxation of long-term resident, non-domiciled individuals

 

Emily Deane TEP, STEP Technical Counsel