United Kingdom to change the non -domestic success ‘not intentionally’ to bank accounts abroad

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It is expected that the ministers of the United Kingdom invest a technical element of the non -dominated tax changes related to the money retained in bank accounts abroad as they direct the legislation to promulgate the October budget to the Parliament.

A provision in the Finance Bill would have meant that the non -dum that remained in the United Kingdom last April incurred taxes on money transferred through bank accounts abroad they had won in previous years when they had been exempt from United Kingdom taxes, according to lawyers.

A treasure officer said Monday that the changes to reverse the effect of the provision were pending ministerial signature.

The treasure said: “We are committed to committing to interested parties to ensure that the reforms that are not Dom work as well as possible. As usual, we are considering any technical comment on legislation as part of this process. “

The expected change would be the last adjustment for the movement of Foreign Minister Rachel Reeves to abolish the non -domestic state, which also introduced taxes on trusts in the high seas and made world assets that are not dom in all the world subject to inheritance taxes.

Last month, Reeves announced a minor change to the controversial policy, which according to fiscal advisors stimulated an exodus of the rich, to facilitate that they do not dominate them not to dominate recover foreign income and profits at a favorable tax rate.

For years, the United Kingdom offered no DOM, rich foreigners residing in the United Kingdom, the opportunity to avoid British taxes on their income and profits abroad when claiming the “remittance base”, which meant that they only paid taxes of the United Kingdom in the money they brought on land.

As part of its budget, Reeves abolished the remittance base, so they do not dominate them in the country have to pay taxes on new foreign income and profits, such as taxpayers with the United Kingdom domicile.

But foreign income and profits previously obtained by the NO DOM under the base of remittances are understood under the work plans to remain without exile unless they are introduced in the United Kingdom.

As part of the changes that are not DOM in the financial law project, the United Kingdom would have applied the legal rules, instead of the customary law, on the capital gain tax to the debts. This change would mean that debts were considered located wherever the creditor is a resident.

The money in the bank accounts is considered debt owed to the holder of the account, so making a deposit in a foreign bank account would create a new debt, which the provisions would have classified to return the money to the United Kingdom and, therefore, incur taxes.

The Treasury official said that the amendments planned to the Finance Law draft would avoid this result. They did not specify what change would be made.

Christopher Groves, a partner of the law firm Withers, said he was “obviously incorrect” if the change meant that the money was put in a bank account anywhere in the world for a NO DOM would be treated as brought to the United Kingdom.

Groves added that he thought that the change was more likely that it was an “involuntary consequence” than a strategy: “I think that the first draft of the legislation is not perfect, which, given how complicated it is, is not very surprising.”

Dominic Lawrance, partner of the law firm Charles Russell Speatlyys, told HMRC in a letter earlier this month that it was “amazing” if a non -Sunday that had used the remittance base became responsible for taxes “when transferring effective to transfer to a non uk.

Professional agencies pass, which represents lawyers and counters, and the Chartered Tax Institute has made HMRC representations to warn about the change.

The Ciot wrote that “there should be no rules such different and complicated introduced in this late stage to determine what is an taxable roughness.”