United Kingdom

Big changes to non-dom tax rules ahead 

Changes for non doms claiming the remittance basis and also for those owning UK residential property.

New definition of domicile for tax purposes


In the 2015 Summer Budget the Government announced plans that will affect UK resident but non-UK domiciled individuals (non-doms), who have been or expect to be tax resident in the UK for more than 15 years. These new rules will take effect from April 2017. 

On 30 September 2015 the Government published a consultation document setting out further details on these ‘deemed domicile’ proposals. Any foreign domiciled individuals who have been resident in the UK for more than 15 out of the past 20 tax years will be deemed domiciled for all UK tax purposes. As a result:


  • they will no longer be able to claim the remittance basis in respect of non-UK income and gains and will be subject to UK tax on worldwide income and gains as they arise; and
  • both foreign and UK assets will be subject to inheritance tax (IHT).


It is also proposed that individuals with a UK domicile of origin and who are born in the UK,  but who have left the UK and acquired a domicile of choice elsewhere as a matter of law, will be treated as having a UK domicile of origin for all tax purposes on their return to the UK.


There will be a special regime that applies to trusts established before an individual becomes deemed domiciled under these proposed new rules.


Changes to inheritance tax


Changes announced in the 2015 Summer Budget also seek to extend the UK IHT net to all residential properties in the UK that are owned by non-doms, whether the non-doms and any companies that own the properties are resident in the UK or not. Further information is within KPMG in the UK’s 2015 Summer Budget commentary under the heading- changes to IHT on UK residential property owned through offshore companies. Further details are expected from the Government in late autumn 2015.


Unremitted foreign income or gains used as security for loans


There are also proposed changes to the tax treatment of unremitted foreign income or gains -which are used as security for loans which fund UK spending. In August 2014 HM Revenue & Customs (HMRC) announced fundamental changes affecting all non-dom individuals - and some trustees and other relevant persons - who were planning to use - or have already used - untaxed foreign income or gains as security for loans used in the UK.


Previously HMRC’s widely published approach was that, in commercial circumstances, such income or gains would not be treated as remitted.  However, with no advanced warning HMRC have withdrawn this ‘concessionary’ treatment. From 4 August 2014, HMRC take the view that it is not possible to put in place such arrangements without remitting the income or gains used as security, resulting in a UK tax liability.


Special rules for existing arrangements have been proposed. While we await the final guidance, HMRC’s current published position is that existing loan arrangements made by affected non-doms, where foreign income or gains were used as collateral, must be notified to HMRC by 31 December 2015. This security has to be replaced by 5 April 2016 with ‘clean’ funds to avoid being classed as a taxable remittance.


In light of this announcement, current plans may need to be reconsidered and swift action could be required in view of the possible proposed tax charges. Anyone affected by these changes may need to consider the alternatives available.




There are many issues for non-doms to consider. If you are claiming the remittance basis or are a non-dom owning or seeking to acquire UK residential property, these changes could have an impact on you.


Please get in touch with your usual Private Client contact to discuss how these changes might affect you.

Contact us

Mike Walker

Mike Walker

Partner, Private Client

KPMG in the UK


+44 (0)20 7311 8620

Email Mike

Daniel Crowther

Daniel Crowther

Partner, Private Client

KPMG in the UK


+44 (0)12 2358 2163 

Email Daniel

Private Client Updates: Non-Doms

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