Clarification of the new rules on the future Inheritance Tax treatment of UK residential property, and the tax treatment of non-UK resident trusts, had been eagerly anticipated earlier this year, but HMRC appear to have been dragging their feet in this respect. However, HMRC have in the last week held seminars where accountancy firms and tax advisors, including Saffron Tax Partners LLP, were invited for an update.
It appears that HMRC are being constrained somewhat by the forthcoming elections, as one may have imagined. Due to the local & mayoral elections as well as the EU referendum, HMRC now plan to issue the long-awaited consultation regarding the proposed changes for the taxation of non-domiciled individuals towards the end of June or beginning of July 2016.
This will be just before the onset of the summer holiday season, and leaves a very tight window for HMRC to receive feedback on the consultation and issue draft legislation in time for the deadline of April 2017, when such changes are due to take effect.
HMRC have indicated that they will continue to take a keen interest in those individuals who leave the UK to become non-resident or seek to shed their UK domiciled/deemed domiciled status, to ensure that those individuals are genuinely non-resident and/or non-domiciled.
We at Saffron have been keeping a close eye on developments, but sources from within HMRC have been tight-lipped. Whilst the date for the issue of the consultation documents has been indicated, no further comfort has been forthcoming with regard to additional costs faced by non-doms (and others) who may have already paid substantial ATED charges, but wish to dismantle their UK property holding offshore trust structures.
The message from HMRC for now is to wait and see!