UK tax guide by Blick Rothenberg
Introduction to the British tax system
For an individual or family relocating to the UK, the UK’s “non-domicile” personal tax regime can be extremely beneficial. The “non-domicile” regime means that UK sources of income and capital gains (e.g. rental income from a UK property) are taxable, but overseas sources are only taxable to the extent the monies are “remitted” (i.e. brought to or used) in the UK. The “non-domicile” regime is available freely for the first 7 years of UK residency. This can effectively mean that a person may not have to pay any tax on their overseas earnings for the first 7 years of living in the UK.
Advice to the new comer
To maximise the benefit of the UK’s “non-domicile” regime, it’s important to plan in advance as much as possible, and take appropriate UK tax advice. Any recommended planning actions should be taken before becoming UK resident to ensure the individual’s affairs are structured correctly. The ideal planning time is 6-9 months before the individual believes they will become UK resident.
One of the most important pre-arrival actions is to setup appropriate overseas and UK bank accounts, which are established correctly to allow monies to be efficiently brought to the UK, and can be operated in line with the “non-domicile” regime.
It is also important that the individual makes the relevant claim on their UK tax return in order to access the “non-domicile” regime; therefore, registering with the UK tax authorities, HM Revenue & Customs, and filing an annual tax return is key.