Advantages of the UK tax system for wealthy tax resident in the UK

The UK tax system is interesting for very wealthy individuals who want to pay a minimum of tax while living in the UK

If you are a tax resident in the UK, you are normally taxed on the arising basis of taxation, which means that your worldwide income and gains are taxed in the UK.

This means that even if you have already been taxed in another country, you still need to declare your worldwide income and gains to the UK Revenue and you may still have to pay tax in the UK on them.

In order to avoid having to declare your worldwide income and gains to the UK Revenue, and possibly pay tax on them, you may claim that your domicile is not the UK and therefore file your UK tax return as a Resident Non Domiciled taxpayer (“Non Dom”) claiming the remittance basis of taxation.

This means that you are only subject to UK income tax and capital gains tax on all your UK source income and gains realised on UK assets on an arising basis, but not on any foreign (non-UK) income and gains realised on non-UK assets, unless such income and gains are remitted to the UK.

This system is very interesting for the first seven years of tax residence in the UK. If you keep using this system after 7 years, you will have to pay the remittance basis charge of GBP 30,000 each tax year. If you intend to remit monies from outside the UK to fund your living expenses in the UK, you should also segregate your bank accounts.

To benefit from this system, there are certain conditions and you need to seek specialist advice. Please come and speak to us, we will be pleased to help you.