Implementation of the April 6, 2017 tax changes applicable to non-domiciled individuals, offshore trusts and UK residential property has been delayed because of the forthcoming UK General Election on June 8, 2017. Whilst it is unlikely that the changes will be dropped (especially if the current Government is re-elected), a concern that rushing the legislation through Parliament could result in unworkable legislation has resulted in an unexpected window of uncertainty which will not close until after the election.
In the run-up to April 6, 2017, many clients and advisors took action to prepare for the extensive changes expected to come into effect from that date. These changes included provisions to:
Treat individuals who were resident in the United Kingdom for 15 of the past 20 tax years to be deemed domiciled for all tax purposes
Treat individuals resident in the United Kingdom who were born in the United Kingdom with a UK domicile of origin to be deemed domiciled for all tax purposes
Change the tax treatment of offshore trusts
Charge inheritance tax on the value of non-UK companies attributable to UK residential property and certain loans (and related security) used to acquire such property
However, on April 18, 2017, the Prime Minister announced a snap general election and Parliament voted for it on April 19, significantly shortening the timetable for passing the Finance Bill. Professional advisors wrote to the Government requesting that these changes, and other complex parts of the Finance Bill 2017, not be rushed through before the dissolution of Parliament. It was confirmed yesterday that these provisions will not be enacted before the election.
The Chartered Institute of Taxation has indicated that these changes likely will be introduced following the election, regardless of the election result. However, no clarification has yet been provided regarding from when the changes will apply. We will be watching closely as events unfold and will provide updates where possible.