If you are a US citizen or other non-UK citizen living on a temporary basis in the UK, or if you are not resident in the UK but own UK property or other UK assets, then you need to consider how to structure your affairs most advantageously for tax and family purposes.

The UK tax system, at the time of writing, is generous to non-domiciliaries — that is, those people who reside here (often for employment) but who originate elsewhere and who intend to return there. A person may continue to reside here for many years and yet retain the tax advantages of being a non-domiciliary. In brief these are:-

  • no UK income tax on non-UK source income not brought into the UK;
  • no UK capital gains tax on gains from non-UK assets not brought into the UK; and
  • no UK inheritance tax on assets situated outside the UK.

There can also be disadvantages to non-domiciliary status and to plan effectively the tax rules of your country of origin and the place where your other assets are situated will need to be taken into account. The US and UK tax systems, and other European systems, do not fit easily together and the right solution under one system may give rise to unnecessary tax charges under another. There may also be major changes to the UK rules affecting non-domiciliaries and it is, therefore, important that any arrangements made remain flexible and reversible.

Jones Day has a long-standing Private Client practice on both sides of the Atlantic and is able to offer tax and estate planning expertise in both the US and the UK. The London Office tax team advises on:-

  • the UK personal tax position of US citizens and other non-domiciliaries, in conjunction with advice from our offices in the US and worldwide;
  • estate planning advice and the preparation of wills and trusts for the non-domiciled client effective for both UK and US tax purposes;
  • the creation of trusts in jurisdictions outside the UK for non-domiciled or non-resident clients and advice in respect of the administration and management of such trusts;
  • the tax consequences of holding property in the UK, or overseas, through corporate structures (often used to avoid forced heirship rules in European countries);
  • UK tax residency rules; and
  • gifts between spouses where they are of different domiciles (which can give rise to problems with both UK and US inheritance and gift taxes).

If you are coming to live in the UK, whether or not with the intention of returning to your own country in due course, or you intend to acquire property here, it is important that you seek specialist advice in order to arrange your affairs effectively not only for tax but also to provide suitable arrangements for your family. The Jones Day Private Client teams have the requisite expertise to assist you in relation to tax and estate planning.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.