Our Personal Tax service
Welcome to our Personal Tax Centre.
Our Personal Tax Centre (PTC) is EY’s centre of excellence for personal tax services.
We help around 40,000 individuals prepare and file their annual UK tax return, and our teams of highly experienced professionals provide quality advice across a wide range of issues, and are committed to delivering exceptional service and building strong working relationships with every client.
We help with a wide range of issues, from simple tax returns or repayment claims to very complex returns and specialist tax advice.
Our services are competitively priced according to the complexity of your circumstances, and we always agree fees upfront, which gives clarity, and prevents unexpected charges.
By concentrating our personal tax experience into one centre, we can provide the very best quality service and advice across a wide range of issues, at an affordable price.
UK tax law is complex, and you may be required to file a tax return with HM Revenue & Customs (HMRC) even if your affairs are relatively straightforward. You can check whether you need to file a return using HMRC’s guidance.
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- Non dom draft legislation published
The Government has confirmed its intention to introduce the changes to the taxation of non-UK domiciled individuals that were withdrawn from the Finance Bill prior to June’s General Election. These are to be included in a Finance Bill expected to be published in the Autumn. However, updated draft clauses relating to the changes have been published.
The changes are proposed to take effect from 6 April 2017, as originally expected.
The changes to the draft legislation appear to be relatively minor and to aid clarity, meaning that in essence they would take place as expected.
It should be noted that the legislation is still in draft form, but a brief reminder of the key changes is set out below.
As always, specific advice is essential due to the nature of the topic and the residual uncertainty (for example political risk).
- The changes are expected to be included in the next Finance Bill, anticipated to be published in early Autumn 2017. It has been confirmed that the start date for these changes remains 6 April 2017, providing the legislation is finalised in its current form.
- Individuals with a non-UK domicile of origin who have been resident in the UK in at least 15 out of the last 20 years will be deemed domiciled in the UK for Income Tax, Capital Gains Tax and Inheritance Tax purposes from 6 April 2017.
- Individuals born in the UK with a UK domicile of origin but have acquired a non-UK domicile of choice will be deemed domiciled in the UK whenever they are UK resident.
Capital Gains Tax rebasing
- Rebasing will be available for individuals who became deemed domiciled in the UK on 6 April 2017 under the 15 out of 20 year rule. Rebasing will only apply to assets which were foreign situs assets from 16 March 2016 (or from date of acquisition if later) until 5 April 2017. To qualify for rebasing the individual must remain deemed domiciled until the date of disposal and must have paid the remittance basis charge.
Mixed fund cleansing
- It will be possible for individuals to take action to cleanse mixed funds in the period to 5 April 2019
- There had been some uncertainty regarding whether this would apply to income and gains arising before 6 April 2008. The new draft clauses contain measures which extend the mixed fund cleansing rules to income and gains arising before this date.
- The method for identifying the constituent parts of the mixed fund and also for segregation/cleansing remains unclear
- There will be special rules (protections) for foreign income and gains arising in offshore trusts established by non-UK domiciled individuals prior to becoming deemed domiciled in the UK. The protections will be lost where property is added to the settlement (‘tainting’), with certain exceptions. These provisions are broadly unaltered from those published in March 2017. Any actions to prevent tainting must be judged by reference to these clauses, particularly with regard to outstanding loans (see below).
- For settlors who became deemed domiciled on 6 April 2017, existing loans to trustees which are not on arm’s length terms would taint settlements at that date. However, this rule will not apply provided the loan is either repaid or put on commercial terms by 6 April 2018 (commercial terms is strictly defined in the legislation).
- To the extent that payments out of offshore trusts are matched to capital gains, they will be matched and taxed under the existing provisions. However, where an individual has become deemed domiciled in the UK, any capital payment or matched capital gain will not benefit from the remittance basis.
- To the extent that payments or benefits out of trust are matched to income, in most cases there are additional rules to ensure that income can be matched to payments made to the settlor. There are also rules which will tax the settlor on payments to non-residents and to those claiming the remittance basis, where the capital payment or benefit is not remitted. These rules will apply to trusts whether the settlor has become deemed domiciled or not.
- Major changes to taxation of non-domiciled individuals
Our experienced non-dom advisory team have been following these changes very closely, and can advise on how the proposed new rules could affect your UK tax position and help you plan ahead.
The proposed rules were removed from Finance Bill 2017 before it was passed through Parliament in advance of the General Election, and it is currently unclear if or when the proposals might make a return.
Given the ongoing uncertainty around the rules, particularly the commencement date, non-doms will want, in many cases, to consider continuing to postpone certain actions as far as is practical and commercially possible.
Where action cannot be postponed until we have further detail from the Government, specific, tailored advice should be sought, even if advice has previously been provided.
There are certain actions which it may be prudent to consider now, particularly with regard to non-UK bank accounts and the separation of funds.
As a reminder, the main points that had been proposed in the draft Finance Bill 2017 but subsequently withdrawn are as follows:
- Individuals who have been UK resident in at least 15 out of the previous 20 tax years will be deemed domiciled for all UK tax purposes. The remittance basis will no longer be available for individuals deemed domiciled.
- There will also be a deemed domicile concept for returning UK domiciles, for those born in the UK with a UK domicile of origin.
- The UK taxation of offshore trusts will change, with some reliefs being introduced, providing strict conditions are met.
- UK residential property held via offshore structures will no longer be outside the scope of UK inheritance tax.
Alongside these changes, transitional provisions were proposed to provide some valuable reliefs for non-domiciled individuals in certain circumstances, and where relevant conditions are satisfied, including:
- Opportunity to rebase assets for capital gains tax purposes
- Opportunity to segregate and cleanse mixed funds.
- Trusts: Inheritance tax and IHT100 returns
Our PTC has a dedicated trust team handling all aspects of trust taxation, including trust tax returns, inheritance tax (IHT) returns, capital gains holdover claims, and trust advisory services.
The 2006 Finance Act introduced some major changes to how trusts were charged to IHT. As a result, from March 2016 an increased number of trustees will be required to submit IHT100 returns and pay IHT liabilities to HMRC.
This may be relevant to trustees who hold investment bonds, life policies, discounted gift trusts, loan trusts, investment portfolios, property or any other trust assets.
We can advise trustees of their obligations to file IHT100 returns, calculate any IHT payable and prepare the IHT100 returns on behalf of trustees.
Please e-mail us to find out more.
- Buy to let landlords
There have been major changes to the taxation of rental income from residential properties, and an increased charge to stamp duty land tax (SDLT) in relation to the acquisition of additional residential properties.
These changes will potentially affect all individuals receiving rental income from residential property, and those affected are likely to see an increase in their tax liability. Landlords should therefore consider how these changes will affect them.
Our experienced team of tax advisers can advise landlords on how the changes may affect their tax position, and identify potential cash flow issues. We can also advise on options available to landlords when taking the changes into account.