You and your clients deserve to have a degree of certainty about rules that affect your daily lives.
This week changes to inheritance tax and non-domiciled individual taxation rules were dropped in their entirety from the Finance Bill 2017 after prime minister Theresa May did a major U-turn and decided she would hold a general election on 8 June.
In order to get the bill through parliament before we faced another barrage of flyers through our letterboxes from earnest faces in suits begging you to elect them as your member of parliament, huge swathes of rules were dropped.
Given the upheaval the non-dom taxation changes caused for these individuals, the ditching of these rules was particularly surprising and unsettling.
As Rupert Clarey, partner at family office firm Maitland, points out: “Many non-doms and high net worths would have been organising themselves and making significant decisions on the basis that the new regime will have taken effect from 6 April 2017.”
The changes to non-dom tax rules would have increased the tax take from these individuals from 6 April.
To recap, the rule change would have deemed individuals who had been UK tax resident for more than 15 out of the previous 20 years to be UK domiciled.
They would no longer qualify for the ‘remittance basis’ and become subject to income tax and capital gains tax on their personal worldwide income and gains.
In addition, inheritance tax could become due on their worldwide assets.
Final legislation for the non-dom tax changes was only published on 20 March following numerous delays.
As a result of the government dragging their heels with the finer details, many people were required to reorganise their affairs in a hurry and at considerable expense during a two week window.
Will they get that expense refunded by the government? Of course they won’t.
Unlike this industry the government can make as many U-turns as they like and seemingly never have to apologise or pay for the expense their sudden changes of heart cause.
This latest turn of events will be incomprehensible to many non-doms.
I know I have said it before, but following the cull of tax changes in the Finance Bill I think it needs saying again.
As we approach exiting the European Union the people who lead us need to look like they know what the hell they are doing.
People need to know what they face tomorrow and be confident that if they carefully plan they will benefit from that action.
What went on with the Finance Bill this week does not reassure anyone.
As Chartered tax adviser Mark Davies so beautifully sums up: “Non-doms who intended to fund their lifestyle in the UK by taking advantage of the rebasing election or the cleansing provisions will now need to wait until next year.