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Where Taxpayers and Advisers Meet

7 of the last 10 years - non-dom rules

shawn_phade@yahoo.co
Posts: 39
Joined: Wed Aug 06, 2008 3:05 pm

Postby shawn_phade@yahoo.co » Thu Jul 10, 2008 6:17 am

Can someone explain when the new rules would apply.

Say X became resident in May 2005. I guess if the question was asked (in retrospect) on April 6th 2005 the answer would be tax resident for 1 (the then current) year of the last 10 and so on; per the table below. On April 6th, 2011 the answer would be 7 (including the then current year) of the last 10, does that therefore make any offshore income from April 6th 2011 to 2012+ subject to the rules?

How many years resident asked on April 6th:
2005 1
2006 2
2007 3
2008 4
2009 5
2010 6
2011 7

Or does it have to be 7 completed years and you are not subjected to the new ruiles until April 6th 2012+?

Thanks
Shawn.

JSK TAXATION
Posts: 200
Joined: Wed Aug 06, 2008 2:18 pm

Postby JSK TAXATION » Thu Jul 10, 2008 6:36 am

shawn_phade@yahoo.com,

S809F (1)(b) ITA states that "...the individual has been resident in the UK in at least 7 of the 9 tax years immediately preceding the relevant year...".

HMRC's notes on the draft legislation make it clear that they consider 'split years' as years of residence.

Hope this helps.

John S King
Chartered Tax Adviser
www.taxation-advice.com
John S King
Chartered Tax Adviser
e: help@taxation-advice.com
w: http://www.taxation-advice.com
01732 897850

maths
Posts: 7581
Joined: Wed Aug 06, 2008 3:25 pm

Postby maths » Thu Jul 10, 2008 9:50 am

The new rules apply from 6.4.08.

Assuming you are non-UK domiciled if you wish non-UK source income and capital gains to be subject to UK tax on the remittance basis then a claim needs to be lodged each tax year starting 2008/09.

The above applies (subject to certain exceptions) irrespective of the number of prior tax year's residency.

The 7 out of the previous 9 tax year rule, if satisfied, creates the additional requirement to pay the £30,000 if remittance basis treatment is required.

In your example the £30,000 would be triggered for the first time in the tax year 2012/13 not 2011/12.

Steve'o
Posts: 1
Joined: Wed Aug 06, 2008 1:52 pm

Postby Steve'o » Mon Jul 28, 2008 3:52 pm

So assuming person "x" is declared non domicile by choice and has completed a dom1 to that effect, what method (assuming there is one) does the HMRC use to prove or disprove this state of mind?


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