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Deemed domicile & enveloped dwellings changes confirmed as government announces Finance Bill No. 2

13/07/2017

If you are covering the government’s announcement that it will legislate for all policies that were included in the pre-election Finance Bill, including those to do with deemed domicile and enveloped dwellings, please see the following commentary from Old Mutual Wealth financial planning expert Rachael Griffin.

Deemed domicile & enveloped dwellings

Under current rules an individual becomes deemed domicile in the UK for tax purposes if they have spent 17 out of the last 20 years in the UK. The finance bill was expected to reduce the time-spent in the UK to 15 years out of the last 20. This change was placed on hold before the election but will now go ahead.

The government will also press ahead with changes that mean a non-domicile who holds property in the UK from 6 April 2017 through an overseas corporate structure (commonly known as enveloped dwellings) will now be subject to IHT on the value.

Rachael says:

Rachael Griffin“The ambiguity over these measures will undoubtedly have created confusion and uncertainty for many people – both inside and outside the UK.

“Both the deemed domicile and enveloped dwellings reforms placed on hold before the election were measures that people will have planned for in advance. Many people will already have made preparations before the Finance Bill was pared back, so for a lot of people this will simply mean that the plans they had already put in place were worthwhile after all. New clauses have been added to the domicile changes that have made some small amendments, however these are technical changes and the basic principle remains the same.

“Those who have not put plans in place to address any inheritance tax (IHT) liability while they were waiting for clarity should now press ahead with their plans.”  

 

For more information contact

Michael GlenisterOld Mutual Wealth020 7778 963807469 144535michael.glenister@omwealth.com
Kathleen GallagherOld Mutual Wealth023 8072 629307990 004932kathleen.gallagher@omwealth.com

Notes to Editors:

About Quilter plc:

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