Non Domicile Tax

Non domiciled (non dom) owners of UK properties face paying more tax if the property has been purchased through an offshore company, according to new government proposals to reduce tax avoidance in the UK.

Previously, non doms who invested into UK were entitled to tax relief. In relation to UK property, non doms were entitled to a number of tax advantages, and in particular an exemption from inheritance tax if the property was purchased through an offshore company.

However, the former chancellor George Osborne announced in last summer’s Budget that this tax advantage would cease as the government continues to clampdown on tax avoidance.

The new tax reforms will mean that the non dom owners of UK properties will now pay more, not less tax as a result of the property ownership through offshore companies. There was a hint that concessions could be made if the offshore companies were restructured, also known as de-enveloping, but the Treasury considers this inappropriate at the current time.

There has been previous concern raised about UK property ownership through foreign companies, with campaigners citing that it enabled international criminals to launder money through UK property.

A number of celebrities have also faced criticism for purchasing UK property through offshore companies as a way of reducing their tax liability, and hiding their identity from public records.

HMRC will continue to clampdown on tax avoidance in the UK and it is estimated that this new measure to target non doms will raise £285m in the next 5 years.

Our team of tax disclosures professionals can assist if you have unpaid tax in the UK, or are facing the possibility of having to make a voluntary tax disclosure.

We also have particular expertise to assist individuals who have undeclared rental income from second properties, by assisting them through the Let Property Campaign.

For more information or to discuss your tax affairs in complete confidence with our experienced tax disclosures team, call us on 0113 387 5670, email us at enquiries@forthsonline.co.uk or fill out an Enquiry Form and we will contact you directly.