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British ministers should reverse a technical element of non -dom -working tax changes relating to money held in bank accounts abroad while they direct the legislation to adopt the October budget by the Parliament.
A provision in the financing bill would have noted unmolding Who stayed in the United Kingdom in April in April in April initiated the funds on bank accounts abroad that they had won in previous years when they had been exempt from the United Kingdom, according to Lawyers.
A Treasury official said on Monday that changes to reverse the effect of the provision were awaiting ministerial sign.
The Treasury said: “We are committed to getting involved with stakeholders to guarantee that non-domed reforms work as well as possible. As usual, we are considering technical comments on legislation as part of this process. »»
The expected change would be the last adjustment to the move of Chancellor Rachel Reeves to abolish the status of non-dom, which also introduced tax On offshore trustees and has made the world’s assets of non-Domains responsible for the Tax on Successions.
Last month Reeves announced A minor change in controversial policy, which, according to tax advisers, has stimulated an exodus of the rich, to facilitate the refreshment of foreign income and gains at a favorable tax rate.
For years, the United Kingdom has offered non-doms-rich foreigners living in the United Kingdom-the possibility of avoiding British taxes on their income and their gains abroad by claiming the “base of versions” , which meant that they only paid British taxes on the funds brought to the ground.
As part of its budget, Reeves abolished the basis of versions, so that the non-Domains that remain in the country must pay taxes on new foreign income and gains, such as ordinary taxpayers of the United Kingdom.
But foreign income and earnings previously won by non-doms under the base of the fund are intended for work plans to remain unpossed, unless they are brought to the United Kingdom.
Within the framework of non-Dom modifications in the financial bill, the United Kingdom would have applied statutory rules rather than rules on capital gains in debts. This change would mean that the debts were considered to be located wherever the creditor lies.
Money in bank accounts is considered to be debt due to the account holder, therefore deposit on a foreign bank account would create a new debt, which the provisions would have classified as bringing money to the United Kingdom and, by Consequently, contract taxes.
The head of the Treasury said that the changes provided for in the financial bill would avoid this result. They did not specify which change would be made.
Christopher Groves, partner of the law firm Withers, said that he was “obviously false” if the change meant that money was put in a bank account all over the world by a non-dom would be treated as having been having been brought to the United Kingdom.
Groves added that he thought that change was most likely to be an “involuntary consequence” rather than a strategy: “I think that the first project of the legislation is not perfect, which, given its complication , is not extremely surprising. “
Dominic Lawrance, partner of the law firm Charles Russell Speechlys, told HMRC in a letter earlier this month that he was “surprising” if a non-domic Tax “by transferring species to a non-UK bank account in its name”.
Stage of professional organizations, which represents lawyers and accountants, and the Charterd Institute of Taxation both made representations at HMRC to warn of change.
The Ciot wrote that “there should not be any periods so different and complicated introduced at this late stage to determine what is a taxable payment”.
