UK tax guide by Smith and Williamson
Introduction to the British tax system
For historical reasons, dating back to medieval times, the UK tax year runs from 6 April to 5 April.
The UK has operated a system of self-assessment since the mid-1990s so that many individual taxpayers are required to self-assess their UK tax liabilities by completing a tax return (although there are proposals for introducing a digital tax system, which is expected to change this to a mixture of digital reporting and checking).
Despite the political uncertainty of recent years and the particular focus on non-domiciled individuals, the UK tax system can still be very attractive to international families; their offshore assets will not necessarily need to be reported in the UK.
Advice for the new comer
Families should seek tax advice before arriving in the UK, particularly to ensure that income and gains that arise before becoming UK resident are not taxable in the UK and should be ring-fenced.
Families should review:
- The structure of their non-UK bank accounts;
- Any non-UK entities and how they are to be managed and controlled;
- Whether any non-UK assets can be rebased, because if the gain is taxable it will be by reference to the original acquisition cost; and
- The timing of the family’s arrival in the UK, because an individual could be treated as UK resident from the start of a tax year, 6 April, even if they do not arrive until later.
In addition, significant changes are in progress to the UK taxation of non-domiciled individuals, offshore trusts and UK residential property. While the legislation is still in draft, it is likely to be effective from 6 April 2017.