The Remittance Basis

The UK tax system provides a unique opportunity for individuals who are resident foreign domiciliaries to reduce their exposure to UK tax. Whilst the current regime will end on 5 April 2025, there remain opportunities for UK resident non-doms to utilise these rules in the meantime.

Understanding the complexities of the remittance basis

Notwithstanding their imminent abolition, the current rules will remain of relevance in relation to foreign income and gains arising prior to 6 April 2025.

By segregating your wealth between that in the UK and that kept overseas, any income and capital gains on your overseas wealth will only be subject to UK tax to the extent that it is remitted to the UK. This position can be often be extended through the use of an offshore trust, where circumstances allow.

The remittance basis also includes relaxations to encourage investment into the UK. Remittances of funds to invest into UK limited liability companies are exempt from UK tax provided those funds are promptly removed from the UK when the investment is sold.

The remittance basis comes with its complexities and remittances can be made inadvertently, either directly or indirectly. However, with the proper structuring of your financial affairs and the help Ritchie Phillips can provide you, it should be possible for you to take advantage of this unique opportunity. Please get in touch if you would like to discuss the above.

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