UK tax changes 2015 and beyond

The final UK Budget before the May General Election was delivered on 18 March 2015.

Taken together with other announcements made previously, as usual, there are various changes to the UK tax rules coming into effect this year.

The election manifestos by the different political parties also promise further tax changes in the years ahead.

Here is a summary of some of the points which affect the international community in the UK.

The most fundamental potential change for the international community is the Labour Party’s UK tax changes 2015 and beyond

proposal to end the tax advantages which are available to non-domiciled UK residents.

At the time of writing, the outcome of the election is still not known, but if this proposal is taken further by a new Government,

it will result in major changes to the way many international individuals in the UK are taxed going forward.

As is the case under the current rules, it should never be assumed that UK tax changes 2015 and beyond

foreign income and gains are not reportable simply because they arise outside the UK.

The full UK tax implications of any income and assets held outside the UK always need to be considered.

It is not unusual for income to be taxable in more than one country at the same time

(although foreign tax credit relief will often be available to alleviate actual double taxation).

To make matters more complicated, the calculation rules in the UK may be different compared to the country where the income or gain arises,

and the appropriate rates of exchange to pounds sterling need to be used in the UK calculation.

This can have the result that a loss in say euro terms could represent a taxable profit in pounds sterling,

leaving the taxpayer with an unexpected UK tax bill.

The remittance basis rules (“the non-dom rules”) have so far been available to eliminate some of these problems for

many foreigners, at least for the first seven years of residence in the UK.

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