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Non-UK domiciles with overseas assets left in limbo following the Budget


Changes potentially due to come in on 6 April 2017 could mean some non-UK domiciles may no longer need to rush to sell their overseas assets before they become deemed UK domiciled, and others may be thousands of pounds better off if they hold onto overseas assets until after they become deemed UK domiciled. However, this change is not expected to be consulted on until later this year, and changes won’t be confirmed until the Finance Bill 2017, so non-UK domiciles face a period of uncertainty.

The Budget introduced a new Capital Gains Tax (CGT) ‘exemption’ for assets held overseas by non-UK domiciles. The detail is not yet known, but it will potentially impact all non-UK domiciles that become deemed UK domiciled for tax purposes on or after 6 April 2017. Rather than being liable to UK CGT on the entire gain from the disposal of an overseas asset, they could instead only be liable to UK CGT on any gain since 6 April 2017.

This rebasing of CGT as at 6 April 2017 is potentially good news for non-UK domiciles. It means any gain on assets they hold overseas will be protected up to 6 April 2017 once they become deemed UK domiciled. This could take pressure off non-domiciles who were considering disposing of their overseas assets before they become UK domiciled, and could mean they pay thousands less in tax.

Currently, non-UK domiciles living in the UK have two options when it comes to paying tax on overseas income and gains. They can pay UK tax as and when the liability arises, or they can choose to be taxed, under the ‘remittance basis’ i.e. only taxable if the gain is brought to the UK. If they chose the remittance basis they have to pay a tiered ‘remittance basis charge’. 

Non-UK domiciles who currently use the remittance basis are not liable to CGT in the UK on the disposal of overseas assets, which is why many may be considering disposing of overseas assets now before they become deemed UK domiciled. This new proposal will mean they may no longer need to do this as all gains up until 6 April 2017 may be exempt from CGT anyway.

Non-UK domiciles who do not use the remittance basis, and pay UK tax as and when the liability arises on an overseas disposal may be better off holding on to their overseas assets until after they become deemed UK domiciled (provided this is after 6 April 2017), as any gain up until 6 April 2017 will be exempt, and they could save thousand in tax on disposal.  

The dilemma many non-UK domiciles will face is whether to take action based upon the proposed CGT change announced in the budget, or wait until more detail is known later in the year in the consultation paper. Even after the consultation, nothing will be set in stone until the Finance Bill 2017, which may not come out until Q1 2017, by which point, any non-UK domiciles who are approaching being in the UK for 15 out of 20 years will  have a very limited time in which to take action. This could be an issue if they suddenly need to sell their overseas property before they become deemed UK domiciled.

Rachael Griffin, financial planning expert, Old Mutual Wealth:Rachael Griffin

“The Budget has potentially delivered a real boost to non-UK domiciles holding assets overseas, especially those who have invested in overseas property and built up substantial gains over the years. They may no longer need to worry about disposing of their overseas asset before they become UK domiciled, helping them make the right long-term financial decisions. The CGT rebasing is effectively a way to make staying in the UK more equitable for non-domiciles sitting on large gains from overseas assets. Non-UK domiciles will need to stay on top of any changes being proposed, and be prepared to act quickly if changes are made, especially if they have been in the UK for 15 out of 20 tax years”.


For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.4 billion in investments (as at 30 June 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

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