Residence and Domicile
The 2009 Finance Bill includes a number of changes to the remittance basis of taxation. These are a direct consequence of feedback provided to HMRC following the significant changes introduced by the 2008 Finance Act.
HMRC have recently published a series of frequently asked questions related to the Finance Bill provisions and to provide up to date guidance on the new rules.
The latest changes are intended to reduce the administrative burden on taxpayers who have low incomes and also small amounts of overseas income and gains as well as small amounts of taxed UK investment income. The changes are also designed to increase transparency in the rules for exemption for certain assets purchased using overseas investment income, such as clothing and other personal items and also a taxpayer’s entitlement to gift aid.
HMRC are currently working on two new guidance manuals. The new ‘Residence, Domicile and Remittances’ manual is expected to be published over the next few months. HMRC expect to publish a further manual entitled the ‘Transfer of Assets’ manual before the end of 2009.
Some new guidance including ‘Residence, Domicile and the Remittance Basis guidance’ (HMRC6) (a replacement for the old IR20 manual) has already been published. The following publications have also recently been made available:
– The new technical guidance on the remittance basis;
– The new technical guidance on domicile;
– New guidance on Capital Gains Tax changes affecting beneficiaries of Non-Resident Settlements;
– New guidance on the application of the remittance basis to the Transfer of Assets.