On 13 July 2017, HMRC published some draft legislation for Finance Bill (No.2) 2017 with minor amendments for the Deemed Domicile rules.

The provisions will be back-dated and apply from 6 April 2017:

  • A new concept of Deemed Domicile for income and capital gains tax purposes for long term UK residents.
  • The legislation applies to individuals who have been resident in the UK for fifteen of the last twenty years or who were both born in the UK and have a domicile of origin here; interestingly, the deemed domicile rules do not distinguish between UK jurisdictions.

The new legislation clarifies the proposed rules for cleansing mixed funds, and these will apply to amounts held prior to 6 April 2008. 

  • Under the current rules, remittances from an account containing funds from multiple sources are subject to a strict ordering, with income transferred first.
  • Until 5 April 2019, offshore transfers between accounts can be the subject of an election to specify which of the funds in account A are being transferred into account B.  This allows the capital in account A to be “cleaned”, which would allow it to be remitted without tax consequences.

See Non-domicile status and tax


For assistance as a non-domciled individual or in respect of IHT and offshore companies please contact the Virtual Tax Partner helpline.

External links: HMRC Deemed Domcile Draft provisions

Useful guides:

Non-UK domicile status & tax

IHT: estate planning checklist 



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