The latest round of draft legislation in relation to the 5 April 2017 non-domicile changes was published last week.
Whilst we are edging closer to a final set of rules after over 18 months, each announcement continues to throw-up surprises for those non-domiciled individuals who are attempting to arrange their affairs in advance of becoming 'deemed domiciled'.
In the latest twist, HM Treasury has now categorically confirmed that non-reporting offshore funds will benefit from the automatic rebasing provision. In the consultation response published on 5 December 2016, the firm suggestion from HMRC was that a gain subject to income tax (i.e. a gain resulting from the sale of a non-reporting offshore fund) would not be able to benefit from such rebasing. This would have meant affected non-domiciled individuals having to manually rebase such holdings i.e. by selling their positions and re-acquiring them after 30 days, and some had already started to take this action.
The clarification is welcomed as it will avoid having to take any physical action in advance of 5 April 2017, but it would have been far more helpful if HMRC had taken the sensible view on this matter from the outset.
For more information please contact private client partner Nimesh Shah at firstname.lastname@example.org