Non-doms face tax return judgment day
“One small slip could trigger a disproportionately high tax bill” for non-doms, according to KPMG
“One small slip could trigger a disproportionately high tax bill” for non-doms, according to KPMG
For non-domiciled taxpayers the tax filing deadline of 31 January for their
2008/09 return could be “the most important tax return of their lives”,
according to KPMG.
The rules for so-called “non-doms” living in the UK came into force in 2008,
but David Kilshaw, KPMG’s head of private client advisory services, says this is
the first time that the new rules will have an impact.
“UK resident non-dom taxpayers have to decide whether to claim the remittance
basis – keeping their offshore profits outside the UK tax net – or to pay UK tax
on their worldwide income or gains. For those living here for seven or more
years, they also have to pay the £30,000 ‘fee’ if they want to use the
remittance basis,” Kilshaw says.
“These are complex new rules, which tax payers and HMRC alike are struggling
with. HMRC can be expected to enquire into a large number of returns to make
sure they are correct, and rightly so. But it is also to be hoped their approach
with be sympathetic and understanding. If HMRC were to be unduly aggressive or
suspicious in their dealing with the returns filed, this could be the straw
which causes many non-doms to leave the UK.”
Kilshaw concludes: “There are many rules and potential traps, so non-dom tax
payers need to consider their returns very closely. One small slip could trigger
a disproportionately high tax bill.”
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