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Autumn 2003 Newsletter

A change on residence?

It is well known that "becoming a tax exile" and "putting your money offshore" are ways of avoiding tax. The trouble is that the rules are complicated, and people get into trouble by optimistically believing they are entitled to tax exemptions which they are not. If you are going to live abroad, or you have non-UK origins (called a "foreign domicile"), you may enjoy some tax advantages, and we will be happy to advise you on what actually works.

The Inland Revenue are unhappy with some of the curious effects of the law, and published a review of the current rules earlier this year. This is only a very tentative step towards making changes - the review did not even contain any proposals. But it included a number of examples with comments to the effect that the present rules did not produce a fair result, so those are presumably the areas in which the Revenue want changes. At least the review confirmed that the Revenue agree that these advantages exist at present!

We will keep an eye on the situation and keep you posted when more specific proposals are published.

The Revenue's review is at www.inlandrevenue.gov.uk/budget2003/residence_domicile.pdf. Section 2 contains numerous examples of "anomalies" arising under the present rules, and Section 4 contains the overriding principles which the Revenue would like to see put into effect in any changes. The document is also useful for an overview of the comparable rules in a large number of other countries, from Australia to the USA.