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2025 UK Tax Changes for Non-Doms: Do’s and Don’ts

Tax

Significant changes were introduced to the UK’s tax rules for non-domiciled individuals from 6 April 2025. The remittance basis for non-UK domiciled individuals has been replaced with a residency-based system. Longer-term UK residents will be taxed on their worldwide income and gains as they arise. These changes mean that anyone affected needs to take a fresh look at their financial affairs. Good planning, keeping clear records, and getting the right advice will be important to avoid unexpected tax liabilities and to make the most of any reliefs still available.

Here are the essential Do’s and Don’ts for non-doms to help navigate the transition:

Do’s

1. Review Worldwide Income and Gains
  • From 6 April 2025, all longer term (over 4 years) UK tax residents must report and pay UK tax on worldwide income and gains as they arise, regardless of remittance.
  • Subject to appropriate advice you may wish to consider investing for long term capital growth or other financial strategies which defer the realisation of income.
2. Utilise the Temporary Repatriation Facility (TRF)
  • Review previous UK tax returns and consider if appropriate to claim the remittance basis for 24/25 in order to benefit from the transitional provisions.
  • Consider remitting pre-6 April 2025 foreign income and gains under the TRF, available for the 2025/26 and 2026/27 tax years, to benefit from a reduced tax rate. ​
  • Review remittances under the TRF to ascertain the most efficient for taxed or untaxed income and gains taxed outside of the UK.
3. Maintain Detailed Records
  • Keep comprehensive documentation of all foreign income, gains, and remittances, including dates, amounts, sources, and related bank statements and foreign taxes paid.
4. Rebase Foreign Assets if Eligible
  • If you have claimed the remittance basis and were neither UK domiciled nor deemed domiciled by 5 April 2025, you may elect to rebase the value of foreign capital assets held personally on 5 April 2017 to their value on that date. Ensure you have records and valuations (where possible) of such assets. ​
5. Review Offshore Trusts and Structures
  • Review any trusts you are either settlor or beneficiary of.
  • Assess the implications of the new rules on offshore trusts, as protections from UK taxation on foreign income and gains arising within such trusts will be removed for most individuals. ​
  • Review any closely held foreign companies you are a shareholder of.
6. Monitor Residency Status
  • Keep accurate records of your days spent in and out of the UK to determine your residency status under the Statutory Residence Test.​
  • Consider if you are tax resident in another jurisdiction also and whether any applicable DTA may apply.
7. Seek Professional Advice Before Transactions
  • Consult with tax professionals before making significant financial decisions, such as selling foreign assets or making large transactions, to understand the UK tax implications.​

🚫 Don’ts

1. Don’t Assume Previous Non-Dom Benefits Still Apply
  • The remittance basis has been abolished from 6 April 2025; relying on previous non-dom advantages could lead to unexpected tax liabilities. ​
2. Don’t Overlook Taxation of Trust Distributions
  • Distributions or benefits from offshore trusts may now trigger UK tax charges; ensure you understand the new tax treatment before receiving such distributions. ​
3. Don’t Delay Using the TRF for Pre-2025 Foreign Income and Gains
  • The TRF offers a limited window to remit pre-6 April 2025 foreign income and gains at a reduced tax rate; This applies for two years at 12% and then one year at 15% delaying beyond this period may result in higher tax charges. ​
  • Don’t assume claiming the TRF will be the most efficient form of remittance, particularly for taxed gains.
  • Don’t assume you will get any or full credit for foreign taxes already suffered.
4. Don’t Neglect Mixed Funds
  • Bringing funds into the UK from accounts containing both clean capital and income/gains without proper tracing can lead to unintended tax consequences.​
5. Don’t Ignore Inheritance Tax (IHT) Changes
  • The UK is moving to a residence-based IHT system; long-term UK residents may be subject to IHT on worldwide assets. Keep detailed records of any gifts or transfers you make, especially if they involve offshore assets.
6. Don’t Make Assumptions About Overseas Workday Relief (OWR)
  • OWR will continue but with changes; ensure you understand the new eligibility criteria and conditions. ​
7. Don’t Undertake Complex Transactions Without Advice
  • Transactions involving offshore trusts, closely held companies, foreign asset sales, company reconstructions, or significant remittances can have complex tax implications; always seek professional guidance.
  • Don’t Assume that Transactions are Exempt in the UK
  • Just because a transaction or a particular source of income is exempted from tax outside of the UK do not assume that this will be the case in the UK.

Contact Us

At Dixcart UK, we are here to help you manage the upcoming changes to the non-dom regime with clear, tailored advice.

For more information on this or to find out how we can support you during this transition, please use our enquiry form or email us at hello@dixcartuk.com.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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The U.S.-UK Trade Agreement Explained: Highlights and Implications

US-UK Trade Agreement International Services

On May 8, 2025, the United States and the United Kingdom announced a significant trade agreement aimed at strengthening economic ties between the two nations. This deal, described as “historic” by both President Donald Trump and Prime Minister Keir Starmer, marks the first major trade accord following the U.S.’s recent overhaul of its global tariff policies.

Key Highlights of the U.S.-UK Trade Agreement

  • Tariff Adjustments: The U.S. has agreed to reduce tariffs on certain British exports. Notably, tariffs on up to 100,000 UK-made cars imported annually will drop from 27.5% to 10%. Additionally, tariffs on British steel and aluminium exports to the U.S. will be eliminated, benefiting UK manufacturers.
  • Agricultural Market Access: The UK will lower tariffs on U.S. agricultural products, including beef and ethanol. This move is expected to create approximately $5 billion in new export opportunities for American farmers and producers.
  • Industrial and Pharmaceutical Collaboration: The agreement establishes a new trading union for steel and aluminium and aims to secure the pharmaceutical supply chain between the two countries.
  • Digital Trade and Services: While the UK’s digital services tax remains unchanged, both nations have committed to negotiating a digital trade pact to streamline regulations and reduce barriers for digital services.

Reactions and Implications

  • Positive Industry Response: UK industries, particularly automotive and steel, have welcomed the tariff reductions. Companies like Aston Martin and Rolls-Royce experienced share price increases following the announcement.
  • Political Perspectives: Prime Minister Starmer emphasized the deal’s potential to protect and create jobs, highlighting it as a step towards economic stability. Conversely, some UK opposition members have criticized the agreement for not fully restoring pre-tariff trade conditions.
  • Global Trade Context: This agreement sets a precedent for future U.S. trade negotiations and may influence discussions with other countries seeking similar arrangements.

The U.S.-UK trade deal represents a strategic effort to enhance bilateral trade relations, offering benefits to key industries while setting the stage for further economic collaboration.

For more information, please contact us: advice.uk@dixcart.com.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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UK–India Free Trade Agreement: Opportunities for Indian Individuals and Businesses

International Services

On 6 May 2025, the United Kingdom and India finalised a landmark Free Trade Agreement, marking a significant milestone in bilateral relations. This agreement, the UK’s most substantial post-Brexit trade deal, is projected to boost the UK economy by £4.8 billion annually by 2040.

Key Highlights of the Agreement

1. National Insurance Exemption for Indian Workers – Employers and Employees

A pivotal feature of the UK–India Free Trade Agreement is the three-year exemption from UK National Insurance Contributions (NICs) for both:

  • Indian employees temporarily seconded to the UK; and
  • Their Indian employers, provided the secondment is part of an intra-company transfer.

This means that neither the employer nor the employee will be required to pay UK NICs during the qualifying secondment period, provided they continue contributing to India’s social security system. The arrangement is reciprocal, applying equally to UK employees seconded to India.

The exemption only applies to secondments involving employers with operations in both countries. It does not extend to Indian nationals employed solely by UK-based entities.

Implications:
  • Cost Efficiency: The combined saving of employer and employee NICs can reduce total employment costs by up to 20%, improving competitiveness and cash flow.
  • Global Mobility Planning: Multinational companies can strategically deploy staff between the UK and India without dual social security contributions.
  • HR Compliance: Businesses must ensure the secondment arrangement meets the definition of an intra-group transfer and is time-limited to three years.
2. Tariff Reductions and Market Access

The agreement eliminates tariffs on 90% of UK exports to India, including sectors like whisky, gin, cosmetics, and food products. Conversely, 99% of Indian exports, such as textiles, food, and jewellery, will face no import duty in the UK.

Opportunities:
  • Export Expansion: Indian businesses can capitalise on duty-free access to the UK market, particularly in textiles and jewellery.
  • Investment Prospects: The reduction in tariffs opens avenues for joint ventures and partnerships in key sectors.
3. Enhanced Professional Mobility

The FTA streamlines visa procedures and employment laws, facilitating the movement of Indian professionals to the UK. This includes contractual service suppliers, business visitors, investors, and independent professionals such as yoga instructors, musicians, and chefs.

Considerations:
  • Talent Deployment: Businesses can leverage this provision to deploy skilled professionals in the UK market efficiently.
  • Compliance: Ensure adherence to the UK’s qualification and experience requirements for professionals.
4. Exclusion of Legal Services

Notably, the legal services sector is excluded from the agreement, with the Law Society of England and Wales expressing disappointment over this omission. This exclusion is seen as a missed opportunity for both economies.

Strategic Implications for Indian HNWIs and Businesses

Tax Planning and Corporate Structuring

The NI exemption offers a strategic advantage for Indian businesses with UK operations. By reducing employment costs, companies can reallocate resources to other growth areas. There is also a benefit of reduced employee NI costs for the individual giving then a higher net income than otherwise. However, it is crucial to evaluate the long-term tax implications and ensure compliance with both UK and Indian tax regulations.

Investment and Expansion Opportunities

The tariff reductions and improved market access present lucrative opportunities for Indian investors and businesses to expand their footprint in the UK. Sectors such as fashion, textiles, and jewellery are poised for growth, given the elimination of import duties.

Professional Mobility and Talent Acquisition

The streamlined visa processes facilitate the movement of Indian professionals, enabling businesses to tap into the UK market’s talent pool and meet operational needs effectively.

Conclusion

The UK–India Free Trade Agreement signifies a new era of economic collaboration between the two nations. For Indian individuals and businesses, this agreement opens doors to strategic tax planning, market expansion, and talent mobility. Engaging with experienced tax advisors and legal experts will be essential to navigate the complexities and maximise the benefits of this landmark deal.

For more information, please contact us: advice.uk@dixcart.com.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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A New Era for UK Inheritance Tax: What the 2025 Reforms Mean for You

Tax

From 6 April 2025, the UK will move to a new residence-based system for Inheritance Tax (IHT), marking one of the most significant shifts in the taxation of wealth in recent decades. These changes will affect not only long-term UK residents, but also internationally mobile individuals who may have previously relied on their non-domiciled status for IHT planning.

What Is Changing?

At present, UK IHT is based on domicile. UK domiciliaries are taxed on their worldwide assets, while non-doms are only subject to IHT on their UK situs assets, unless they become “deemed domiciled” after 15 years of UK tax residence.

From 6 April 2025, the domicile test will be replaced. Under the new rules:

  • Individuals who have been UK tax resident for at least 10 out of the previous 20 tax years will become long-term residents and fall within the scope of UK IHT on their worldwide estate.
  • Long term resident individuals who leave the UK will continue to be exposed to UK IHT on their worldwide assets for a period ranging from 3 to 10 years, depending on how long they were UK resident before departure.

What About Trusts?

The treatment of Trusts will also change. From 6 April 2025, settlor interested trusts will no longer provide protection from UK taxation on income or gains arising within them when the settlor no longer qualifies for the FIG regime. While there will remain an element of IHT protection, these Trusts will be brought within the UK’s relevant property regime.

This means:

  • Trusts will be subject to IHT charges of up to 6% every 10 years on the value of the assets within the Trust
  • An additional exit charge may apply when capital is distributed.
  • Once in the relevant property regime, a further pro rata exit charge will apply if and when the settlor ceases to be a long-term UK resident.

It could take seven full 10-year cycles of IHT charges at 6% for the tax payable by a Trust to exceed the IHT payable if the same assets were held personally and taxed at 40% on death. Nonetheless, the administrative burden and cashflow impact of these periodic and exit charges should not be underestimated.

Broader Changes on the Horizon

Alongside the shift to residence-based taxation, further IHT reforms are expected in the coming years:

  • From 6 April 2026, the Government plans to introduce a cap on Business Relief and Agricultural Relief, limiting 100% relief to the first £1 million of qualifying assets.

From 6 April 2027, unused pension funds will also become subject to IHT on death,

What Does This Mean in Practice?

Now that the new rules are in force, many long-standing estate plans and asset-holding structures must be reassessed under the new regime.

This includes:

  • Reviewing the relevance and efficiency of existing offshore Trusts.
  • Reassessing asset ownership between family members and across jurisdictions.
  • Ensuring clear documentation for residency status and historic Trust arrangements.

The new residence-based approach brings complexity, particularly for internationally mobile individuals and non-doms who previously relied on the excluded property regime. While the window for new planning has now closed, it remains important to ensure that existing structures are compliant and do not trigger unnecessary tax exposure under the new rules.

Final Thoughts

The move to a residence-based IHT regime represents a fundamental change in how the UK taxes wealth at death. For those with international lives or assets, this is a key moment to take stock. For more information on this or to speak to one of our experts, please use our enquiry form or email us at hello@dixcartuk.com.

At Dixcart, we work closely with individuals and families to provide clear, tailored advice in light of changing legislation.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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Gifts with Reservation of Benefit: A Common Pitfall in Inheritance Tax Planning

Tax

Gifting assets during your lifetime can be an effective estate planning tool—but it must be done carefully to avoid unexpected inheritance tax (IHT) consequences.

One of the most common traps is a Gift with Reservation of Benefit (GWROB). This arises where an individual gives away an asset, typically a property, but continues to benefit from it. A classic example would be gifting your home to your children and continuing to live in it rent-free.

Why It Matters?

Under UK rules, a GWROB means the asset is still considered part of your estate for IHT purposes, regardless of legal ownership. In practice, this can result in the asset being taxed on death, defeating the objective of making the gift in the first place.

Can It Be Avoided?

Yes, in some cases. Common exceptions include:

  • Paying full market rent for continued use of the gifted asset.
  • Gifting to a spouse or charity, which are exempt from IHT.
  • Shared occupation: If you give away part of your home and continue to live in it with the new co-owner (e.g. your child), and you each occupy your respective share without deriving a benefit from the other’s portion, a GWROB may not apply. The conditions here can be technical and should be reviewed carefully.

These scenarios must be properly structured and documented to ensure the gift qualifies as genuine in the eyes of HMRC.

What If You’ve Already Made a Gift with Reservation?

If you have already gifted an asset but still benefit from it (for example, continuing to live in a property you have transferred), there may still be planning opportunities.

Releasing a reservation, such as moving out of the property or beginning to pay market rent, can stop the GWROB from applying going forward. However, doing so creates a new potentially exempt transfer (PET) at the time the benefit is given up. If the individual dies within seven years of that point, the PET becomes chargeable to IHT.

It is also worth noting that double charges relief may apply where both the original gift and the retained benefit could theoretically be taxed, ensuring the value is not taxed twice, but usually at the higher amount.

Illustration – Avoiding GWROB by Paying Market Rent

Mr and Mrs James gift their London home to their adult children but continue to live in the property. To avoid the gift being caught by the GWROB rules, they agree to pay their children a full market rent, reviewed annually. The rental income is declared by the children as part of their income tax return.

As long as the arrangement is properly documented and the rent reflects true market value, the property will not be treated as part of Mr and Mrs James’s estate after seven years—potentially saving significant IHT.

A Brief Note on Upcoming IHT Changes

The Spring Budget 2024 announced a shift from a domicile-based IHT system to a residence-based regime, effective from April 2025. This means long-term UK residents, regardless of domicile, may be subject to IHT on their worldwide estate.

This change will bring many more individuals, especially internationally mobile families, within the UK IHT net. As such, gifting strategies (and their interaction with GWROB rules) may become more relevant and should be reviewed in light of the evolving tax landscape.

Next Steps

Gifting can be a powerful part of your estate strategy, but the rules around GWROB are complex. If not handled correctly, a well-intended gift could have unintended tax consequences.

If you are considering passing assets to family members, especially property, we recommend speaking to one of our advisers first by emailing us at hello@dixcartuk.com. At Dixcart, we assist clients with structuring lifetime gifts in a way that aligns with both tax efficiency and family intentions.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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Understanding Private Residence Relief (PRR): Protecting Your Home from Capital Gains Tax

Tax

Private Residence Relief (PRR) is one of the most valuable tax reliefs available to individuals in the UK. It can exempt all or part of the gain made on the sale of your home from Capital Gains Tax (CGT). But while the concept seems straightforward, the rules can be complex, especially when the property has not been your only, or full-time, residence throughout ownership.

This article outlines how PRR works, who qualifies, and what you need to consider if you’re selling (or gifting) a property.

What Is Private Residence Relief?

PRR provides relief from CGT when you dispose of a property that has been your main or only residence during your period of ownership. In many cases, this means that the entire gain on sale is exempt.

To qualify, you must:

  • Own the property;
  • Have lived in it as your main home (not just visited);
  • Not have let it out (other than under permitted lettings relief);
  • Not have used it wholly for business purposes.

How Much Relief Can You Get?

If the property has been your only or main residence throughout your entire period of ownership, any capital gain arising from a disposal will typically be fully exempt from CGT.

Where the property has not been your main residence throughout the full period of ownership, the gain is apportioned based on:

  • The period it was your main residence;
  • Plus the final nine months of ownership (which qualifies automatically, even if you no longer live there).

For example:

If you owned a house for 10 years and lived in it as your main home for 6 years, then rented it out for 4 years before selling it, you could be entitled to relief for 6 years plus 9 months, meaning 69 months out of 120 months (10 years) would be exempt.

The remaining gain would be chargeable and may be subject to lettings relief if applicable.

Lettings Relief

Lettings relief used to be a generous exemption, but since April 2020 it is now only available if you were in shared occupation with your tenant. In most cases, this means the scope of lettings relief is very limited.

If available, it can exempt up to £40,000 of gain (or £80,000 for couples) attributable to the let portion of the property.

Nomination of Main Residence

If you own more than one property, you may choose which one should be treated as your main residence for PRR purposes by making a nomination to HMRC. This must be done within two years of acquiring the second property.

The choice does not have to be based on where you spend most of your time—you simply need to demonstrate some level of occupation and interest.

The rules can be complex, and so professional advice should be sought in this respect.

Gifting a Property

Gifting a property to a family member (e.g. your adult children) still counts as a disposal for CGT purposes, and the same PRR rules apply. If the property was your main home throughout, PRR may exempt the gain. But if it was not, a CGT charge could arise—even if no money changes hands.

This is particularly relevant in lifetime giving or estate planning contexts.

Pitfalls to Watch For

  • Gaps in occupation: Time abroad or in a second home can reduce the exempt period.
  • Delays in moving in: If you buy a house but do not move in promptly, this period may not qualify.
  • Business use: Using part of your home exclusively for work (e.g. a photography studio) could restrict relief.
  • Non-residents: Since 6 April 2015, non-residents are within the CGT net for UK property and can only claim PRR for periods where they met the UK day-count and presence conditions.

Planning Ahead

Private Residence Relief is generous but not automatic. Clear records, well-timed nominations, and careful planning around lettings, gifting, or emigration can all make a difference.

If you are considering selling or gifting a property, particularly one that has not always been your main home, professional advice can help you:

  • Calculate potential gains;
  • Identify available reliefs;
  • Plan the disposal for optimal tax efficiency.

Reporting Residential Property Gains

You need to report the sale and any CGT due within 60 days of the completion date if the sale was completed on or after 27 October 2021. This can be done through HMRC’s online system.

When reporting the gain, you will need to provide details such as the property address, date of acquisition, date of sale, purchase price, sale price, and costs related to the purchase and sale.

Where the return is not filed within 60 days of the date of completion, an automatic late filing penalty of £100 will apply.

More information on reporting residential property gains can be found here: 60-days to Report Residential Property Gains – A Reminder.

How We Can Help

For more information on this or to speak to one of our experts, please use our enquiry form or email us at hello@dixcartuk.com.

At Dixcart, we work with individuals, families and trustees to navigate property disposals and ensure that available reliefs are claimed. If you are unsure whether PRR applies to your situation, or want to plan a future disposal, our private client team would be happy to help.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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R&D Tax Relief is Changing – Here’s What you Need to Know

Tax

Additional amendments to UK R&D tax relief were included in the 2022 Autumn Statement.

From 1 April 2023, we are expecting a number of changes to the UK R&D scheme. This addendum summarises the key points arising from the July 2022 HMRC published draft legislation for R&D tax relief changes, announced in the 2021 Autumn Budget.

These Autumn Budget changes will take effect for accounting periods beginning on or after 1 April 2023. The changes will impact companies claiming under either of the two schemes (SME or RDEC).

The government has a target to raise investment in R&D to 2.4% of UK GDP by 2027 and R&D tax relief forms part of that goal by reducing the cost of innovation for UK companies.

Here are some of the key changes:

Extending Qualifying Expenditure

The good news is that R&D expenditure categories will be extended to include the costs of datasets and cloud computing – however, these costs need to clearly align with direct R&D and cannot be included in R&D claims where these costs only relate to indirect supporting activities.

In addition to this, R&D in pure mathematics will now qualify for relief and can form part of the qualifying R&D activities of the claimant.

Refocusing the Reliefs Towards Innovation Undertaken in the UK

One of the most fundamental changes in the Autumn Budget was to refocus the relief provided to activities performed in the UK or qualifying overseas expenditure.

  • UK Expenditure

Relevant research and development must be undertaken in the United Kingdom. As such, subcontracted R&D work, and the cost of externally provided workers (EPWs), will be limited to work undertaken in the UK.

  • Qualifying Overseas Expenditure

The exemption to the above, is where work undertaken outside the UK is necessary due to geographical, environmental, or social conditions not present or replicable in the UK. Cost of the work, and availability of workers, are specifically excluded as factors. This list is not exhaustive and, in the short term, is likely to create greater uncertainty as to what could be seen as meeting these criteria.

It is worth noting that, to date, there is nothing in the draft legislation that specifically addresses claims for the cost of staff working on projects in an overseas branch of a UK entity- it is hoped this will be clarified as the Bill goes through the Parliamentary process.

Tackling Abuse

In order to support HMRC’s fight against abuse of the R&D schemes, new due diligence and filing processes will be required through a digital system.

The changes to be introduced to the R&D claims submission process include:

  1. claims be made digitally;
  2. the categories of qualifying expenditure incurred need to be disclosed, and brief details provided of the R&D activities;
  3. claims need to be endorsed by a named senior company officer;
  4. the company must inform HMRC in advance of its intention to make a claim within six months of the end of the period to which the claim relates, unless the company has claimed in one of the preceding three accounting periods; and
  5. the details of any agent who has advised the company in making the claim needs to be provided.

The most significant change is point 4. The effect of this is that new claimants will now only have a six month window in order to identify that they will make a claim, as opposed to the current two year window of opportunity.

What can your Business do to Help Maintain their R&D Tax Relief Benefits?

On the back of the above proposed changes, businesses that maintain all, or part, of their R&D activities overseas will need to re-evaluate their potential R&D claims. If your business falls into this category, you will need to consider the practical, commercial, and cost implications of maintaining your current structure versus onshoring to the UK. 

We have identified the pros and cons of each scenario below.

Scenario 1: Keeping your R&D Activities Overseas

Benefits of keeping your R&D activities abroad:

  • commercial needs,
  • expertise,
  • most cost-effective option,
  • changing something that isn’t broken. You have the right people, infrastructure and processes in place so why change it?

With the introduction of the new rules, the obvious loss is that qualifying overseas expenditure will be disqualified from 1 April 2023.

However, the impact of this depends on the type of business you are. For example, if you have an R&D intensive business with majority of costs arising from overseas activities, you should expect to see a substantial reduction in your R&D tax relief claims as opposed to one that is not R&D intensive.  

Scenario 2: Relocating your R&D Activities to the UK

As discussed above, the notable advantages and sacrifices of keeping your R&D activities overseas are in turn, for the short-term anyway, the opposite if you were to relocate the activities to the UK. This will of course depend on each business.

The main benefit of relocating your R&D activities to the UK is inevitably that it will qualify for R&D relief.

However, the change will effectively be like starting new again. The downside to this is the hassle of finding new suppliers and skilled workers, keeping within the budget, costs of relocating/restructuring, training, legal and tax considerations for both company and any employees relocating, etc.

Again, this largely depends on the business as, for some, this may simply be a matter of finding new suppliers within the UK.

Get in touch

If you would like to discuss the R&D tax relief changes announced in the Autumn Budget, or if you would like professional advice on maintaining R&D tax relief benefits, please get in touch: hello@dixcartuk.com.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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Pre-arrival UK Tax Planning for non-UK Domiciled Individuals

Case Study

Due to the impact it can have on an individual’s UK tax liability, it is vital that domicile is fully understood by those wishing to relocate to the UK permanently.

In general terms, if a non-domiciled individual wishes to move to the UK permanently and has no intention to return to their previous country, then there is a strong case they will be considered UK domiciled for tax purposes.

Effective tax planning, pre-UK arrival is therefore critical to avoid potential costly surprises in the future.

UK Domiciled vs Non-domiciled Impact

Firstly, let’s briefly look at the UK tax implications for a person that is UK domiciled vs non-domiciled. Please note both individuals are UK tax resident in the year for this illustration.

Mr UK Domiciled

  • Liable to tax on worldwide income and gains
  • Worldwide assets are subject to UK inheritance tax

Miss Non-domiciled

  • Worldwide income and gains are taxable on the arising basis
  • A claim for the remittance basis can be made which will mean Miss Non-domiciled will only be taxed on her foreign income and gains if she remits it to the UK. If it is kept offshore, she will not be subject to UK tax
  • Non-UK situs assets are excluded from UK inheritance tax

From this, we can see that Mrs Non-domiciled position is usually more advantageous from a UK tax perspective. 

Determining your domicile

In establishing whether a new domicile of choice has been created, careful consideration must be taken for the following points before making a decision to move to the UK:

  • the intentions of the individual;
  • their permanent residence;
  • their business interests;
  • their social and family interests;
  • ownership of property; and
  • the form of any Will that they have made.

This list is by no means exhaustive and there is no single criteria which determines whether an individual is or is not domiciled in the UK. Instead, a ‘balance of probabilities’ approach is taken.

Defend your domicile

Taking into account the above, it is therefore essential to have provisions in place before arriving in the UK, to defend any potential challenge from HMRC.

Domicile enquires can be lengthy and intrusive should HMRC doubt an individual’s non-domicile claim. This can involve months or even years of correspondence involving various questions into background, lifestyle and family and social connections, both from a historic perspective and to establish future intentions.   

Acquiring and maintaining evidence of strong, ongoing links to the country of domicile is crucial for those claiming non-domiciled status, and so is evidence of an intention to leave the UK at a future date. This can be particularly problematic on death, potentially bringing a foreign estate within the scope of UK inheritance tax.

To avoid any hiccups in the future, it may be worth considering having a domicile statement prepared, to provide contemporaneous evidence supporting the claim . 

Case law

IRC v Bullock: Mr Bullock had a domicile of origin in Nova Scotia. He lived in England for 40 years. His wife did not want to live in Nova Scotia. Mr Bullock hoped to return there should he persuade his wife to change her mind or should he survive her. It was held by the Courts that he had a real determination to return rather than a vague aspiration. Accordingly he retained his Nova Scotian domicile of origin and had not acquired an English domicile of choice.

In contrast:

Furse v IRC: Mr Furse expressed a wish to live in England for the rest of his life save only for a contingency that he would return to the USA, should he cease to be physically able to take an active interest in his farm (situated in England). The Courts decided that this intention was so vague as to impose no limit on his intention to remain in England. Accordingly he had acquired an English domicile of choice.

Summary and Additional Information

From the above we can see it is difficult to make a judgement without fully examining an individual’s position in detail.

An individual’s domicile status is a fundamental factor in determining his/her liability to UK tax. It also has implications for other branches of the law.

Due to HMRC’s increased investigations into the tax affairs of non-domiciled, individuals should be prepared to present a robust defence in the event of any challenge from HMRC. A domicile statement can greatly assist, to provide evidence of an individual’s intentions, where it is supported by the facts, and can be particularly useful in situations where enquiries are opened by HMRC after death.

If you require additional information on this topic and further guidance regarding your domicile status, please contact your usual Dixcart adviser or speak to Paul Webb or Ravi Lal in the UK office: hello@dixcartuk.com.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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