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14 July 2017

71: Non dom changes certainty for certainty’s sake

We have news on the non dom changes at last. Where once there was speculation, since yesterday, we can now utter the word ‘certainty’.

The Government sought to quell the rumour mill yesterday by confirming that the non dom changes will be made law in a second Finance Bill to be published in the Autumn following the Parliamentary recess. In doing so the Government went one step further by making the following key announcements which acknowledge the uncertainty that has plagued the future of the provisions since they were withdrawn from the March Finance Bill in the run up to the General Election:

  • all of the non dom provisions are to take effect from 6 April 2017 as originally planned; and
  • updated draft provisions have now been published as a precursor to the second Finance Bill.

What this now means

Those non doms who had begun planned their affairs on the basis the rules were to take effect from 6 April will now be able to continue their planning on this basis. There has been much speculation since the provisions were pulled from the March Finance Bill as to quite when the rules who come into force. As it happens any such speculation was misplaced and the Government (albeit diminished in its Parliamentary power) has sent out a clear message that it is business as usual.

Any further speculation as to whether the provisions might take a different form compared to those published in the March Finance Bill has also been put to rest through the advanced publication of the updated draft legislation. The Government has confirmed that most of these amendments which have been made are to the IHT provisions in relation to UK residential property, the trust protections and the cleansing of mixed fund rules. Any adjustments are understood to be only technical and will not detract from the overall structure of the rules as previously drafted. In all other respects the rules as previously drafted will remain unchanged. Advance publication of the adjustments to the legislation over the summer is clearly helpful and goes one step further in instilling certainty as to the final shape of the rules once they eventually reach the statute books.

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