United Kingdom - Reform of the Remittance Basis Regime

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A consultation document published today sets out further proposals for reforming the taxation regime applying to non-domiciled taxpayers. There are three main elements to the proposals, namely:

• An increased remittance basis charge for longer term UK residents;
• A new relief to encourage remittance basis users to invest in the UK; and
• Various amendments to the current remittance regime, including putting SP1/09 on a statutory footing and allowing an exemption from capital gains tax for foreign currency held in taxpayers’ bank accounts.

While some elements of the proposals are likely to be more favourable to taxpayers than others, overall they appear to offer an improvement to the existing regime, at least for those who are at not residents of the UK for the longer term.