The Remittance Basis for Non-Doms

The UK tax system provides a unique opportunity for individuals who are resident foreign domiciliaries to reduce their exposure to UK tax.

By segregating your wealth between that in the UK and that kept outside the UK, 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. The position can be extended through the use of offshore trusts and foundations where the circumstances allow.

The remittance basis is available either if the de-minimus limits apply or where you pay the remittance basis charge, which is determined by how long you have been in the UK as follows:

Number of UK tax years                                                                                              Remittance basis charge

One to seven                                                                                                                  £nil

More than seven out of nine But less than 12                                                       £30,000

More than twelve out of fourteen but less than fourteen                                 £60,000

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 whilst remittances can be inadvertently made, either directly or indirectly, 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.