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Where Taxpayers and Advisers Meet

How would new non-dom regulations affect offshore savings?

pawelx
Posts:5
Joined:Wed Aug 06, 2008 4:05 pm

Postby pawelx » Fri Feb 22, 2008 3:16 am

UK resident for 2.5yrs, non UK citizen. Was thinking of opening an offshore savings account but not quite sure if tax savings on interest on less than £100k will make sense any longer, given the new regulations on non-doms (in particular, would the £30k charge apply to myself??) I currently have no other non-UK income.

Also, would I need to "apply" for the non-dom status by declaring that with the tax office, or is it assumed given that I don't own a property in UK, don't have UK citizenship, was born and intend to return to a different country.

Sorry if I am asking rather basic questions - please do refer myself to some sources where I could do the research on this myself.
Thank you.

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Fri Feb 22, 2008 3:49 am

If that is your only non-uk income then you will need to pay UK tax on the interest.

pawelx
Posts:5
Joined:Wed Aug 06, 2008 4:05 pm

Postby pawelx » Fri Feb 22, 2008 5:04 am

Sorry but I don't understand - if I had more sources of non-UK income, than I wouldn't have to pay tax on this?
Is this strictly due to the latest changes in non-dom treatment? So that would mean, anyone earing salary in the UK should not bother with offshore account, unless the tax saving on these is more than 30k annualy?

maths
Posts:8230
Joined:Wed Aug 06, 2008 3:25 pm

Postby maths » Fri Feb 22, 2008 5:58 am

Under the proposed new rules you will still be classified as non-UK domiciled (assuming you are at present).

You will not as yet be affected by the £30,000 remittance charge as you have not been UK resident for 7 tax years (out of 9).

Assuming you claim remittance treatment then any non-UK source interest will not be subject to UK income tax until remitted to the UK.

On the other hand for the tax year where remittance basis claimed, you will lose your entitlement to any personal allowances and the annual CGT exemption.

pawelx
Posts:5
Joined:Wed Aug 06, 2008 4:05 pm

Postby pawelx » Wed Feb 27, 2008 2:05 am

(1) Just to clarify on the "claiming remittance" part, is this something that I do at the _end_ of the tax year?
So the scenario would be: I open my offshore savings account this week, but only when I need to fill out the self-assessment for 2008 (i.e. early 2009) will I need to declare myself as non-dom - correct?

(2) As for allowances, I think it is only the annual personal allowance on £5435 of my income (not counting the CGT allowance) so I stand to lose 18% of 5435 = 978£ if I declare myself non-dom?

Thank you


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