Industry News

Second Finance Bill to be introduced 'as soon as possible', with April 2017 backdating on non-dom reforms

Thursday, 13 July, 2017

The UK government has confirmed that a second Finance Bill 2017 will be introduced 'as soon as possible after the summer recess', to implement all of the policies that were withdrawn from the Finance (No.2) Bill 2017 shortly before the general election.

Moreover, all policies originally due to start from April 2017 will be effective from that date.

Those policies include the much-debated non-domicile taxation reforms, concerning inheritance tax for deemed domiciles and overseas property held in offshore structures.

The government has also today published updated draft legislation for a 'small number of clauses taking effect before the [second Finance Bill] is introduced'. These make 'technical adjustments and additions to the previous legislation to ensure that the clauses function as intended’.

The sudden withdrawal left practitioners uncertain as to whether or not – should the non-dom changes be introduced at a later date – they would be backdated with effect from April 2017, or pushed back to next year.

‘Non-doms have been in limbo for the last few months,’ said Robin Vos TEP, a solicitor at Macfarlanes and Chair of STEP’s UK Technical Committee. 'Today's announcement, including the publication of amended draft legislation, brings some welcome certainty both to non-doms and to their advisors.'

‘Most people have been refraining from taking any action until it became clear whether or not the government would press ahead with the amendments and, if so, when the changes would take effect,’ Vos said. ‘However, as we have already discovered, nobody can be certain what the position will be until the legislation is actually passed, and so it is likely that many people will continue to defer taking final decisions until the summer Finance Act becomes law – hopefully, in early Autumn.’

There are more changes on the horizon for non-doms and offshore trusts that have been announced but were not included in the Finance (No.2) Bill 2017. ‘It is quite likely that these further changes will be included in the second Finance Bill 2017, and would then take effect from 6 April 2018’, said Vos. ‘These further changes will need to be factored into any planning that is being considered’.

Sources

Comments

Submitted by Iain Cameron on Fri, 14/07/2017 - 11:36

Will the increased probate fees be introduced in the new Bill or by statutory instrument? Is there going to be any procedure for banks to pay the fee direct, as with IHT and funeral bills, or are executors expected to fund it?

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