FAQ: Remittance Basis Charge: Should I pay it?

June 24th, 2010

Major changes to the UK taxation of so-called non-domiciliaries (non-doms) were introduced from April 2008.   Many UK tax resident non-domiciled taxpayers want to know if they should pay tax on the arising basis (facing a UK tax bill on their worldwide income as it arises) or pay the £30,000 Remittance Basis Charge (RBC) and only be taxed on foreign income they bring into the UK in the year.
This is an extremely complex area.  Tax experts seem to be in universal agreement that the new rules are overly complicated, ambiguous and make it virtually impossible for non-doms to comply with the reporting requirement with any confidence. If you are considering whether to pay the RBC then it may be worthwhile if the following conditions apply to you:

• You are non-domiciled;
• You have more than £2,000 of unremitted offshore income or gains;
• You have been UK tax resident for 7 of the preceding 9 years;
• You have offshore income of more than £75,000 or offshore capital gains over £175,000 (which have not been remitted to the UK).  [Based on current rates of tax for 2009/10].

If the above conditions relate to you, or you are the beneficiary of an offshore trust, a shareholder of an offshore company, are UK domiciled but ‘not ordinarily resident’ in the UK, or are unsure whether to pay the RBC then you need specialist tax advice.
Lynam Tax domicile specialists have decades of experience in dealing with residence and domicile issues.
Call Paul Lynam today for a free discreet discussion on:  0845 643 9997