You might think that with the budget of last week, it is all gloom for non-doms. However, it would pay to revisit a previous government initiative.<\/p>\n
On 6 April 2012, the government introduced the very attractive Business Investment Relief (\u201cBIR\u201d) for non-UK domiciliaries. This is relevant if you are currently a resident in the UK, are treated for tax purposes as non- domiciled (non-dom), and have overseas income and gains.<\/p>\n
Before 6 April 2012, if you brought, for example, \u00a3100,000 into the UK to make an investment (and are a 50% tax payer) then the amount you could have invested was around \u00a350,000 after paying \u00a350,000 in tax.\u00a0 This would obviously discourage you from bringing your money into the UK.\u00a0 However, if you as a non-dom now bring \u00a3100,000 into the UK to invest, you are able to invest the full \u00a3100,000 under BIR.<\/p>\n
This is exactly what Business Investment Relief does, as it allows offshore resources which were previously excluded from the UK to now be invested in the UK tax free.<\/p>\n
In effect \u2013 with top rate Income Tax rates at 50% \u2013 the UK Government is effectively giving a non-dom a subsidy of 50% on their investments.<\/p>\n
In addition, you can also use the other reliefs such as EIS or SEIS when making an investment using funds remitted to the UK. This will also potentially save you up to 50% on your income tax bill (30% for EIS and 50% for SEIS).<\/p>\n
For example, if a UK resident (but foreign domiciled individual) wants to invest \u00a3100,000 in a UK company using foreign income or gains, it can now been done with no exposure to tax; if structured correctly.<\/p>\n