Today the Chancellor of the Exchequer, the RT Hon Philip Hammond MP, announced the Spring Budget 2017. Amidst the seemingly relentless recent political storms regarding the UK's negotiations to leave the European Union, Mr Hammond's speech provided a relative air of calm in the total absence of the word 'Brexit.' Indeed, for private clients eagerly awaiting details of new planning opportunities or impending tax clampdowns, the changes announced today may appear somewhat underwhelming.
While measures such as the improved NS&I bond and the Lifetime ISA are to be welcomed, and much political comment is already being made in respect of increased national insurance contributions for the self-employed, these are hardly the most eye-catching announcements of recent years.
The real headlines, however, were announced long ago. Most private clients will already be familiar with provisions of Finance Bill 2017 announced as far back as July 2015, which will implement major changes to the UK tax regime from 6 April 2017 – specifically in respect of non-UK domiciled taxpayers. Long term resident non-doms will become deemed domiciled for all tax purposes, losing the ability to claim the remittance basis of taxation and suffering knock-on effects for trusts they have settled previously. 6 April will also see UK residential property come within the scope of UK inheritance tax even if held by a non-UK company or trust, resulting in significant tax charges for many existing structures and/or individuals if not reorganised. The rules do provide some concessions, allowing for limited re-basing of assets and cleansing of mixed funds in certain circumstances.
It would be wrong, therefore, to think Finance Bill 2017 is not worth your attention, although perhaps not for the reasons announced by Mr Hammond today. With so many wholesale changes to the UK tax rules, HM Treasury may simply have not had enough time to introduce any more.
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.
