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How does UK non-dom plan actually work?

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DavidS

Active Member
What is the scheme of UK non-dom plan that so many oligarchs use to avoid paying taxes?

What is the structure?
 

manukahoney

New member
It's not for oligarchs, but rather a clever feature that gives you an option to decide if you want to make the UK your permanent home and acquire the domicile.

Long story short - before entering the country with purpose of staying (work/investors visa, etc) you can declare your existing assets as "clean capital" and freely remit it to the UK without any tax implications. You can also do it later, but be aware of keeping the income on these assets separated from the clean capital.

After you entered the country you have like 15 years to benefit from non-dom and every year you may at your convenience claim "remittance basis" for your tax report. If you don't claim it - you pay regular taxes on all your income (both UK and offshore). If you do - you only pay taxes on your UK income, but lose some basic tax allowances (which is OK as long as your non-UK income is substantial).

First 7 years it's "free" (you only lose your tax allowances), then it goes to 30k and more. Still makes sense if you are making hundreds of thousands.

As long as you play nice, don't control any foreign companies, it's a brilliant way to have a low tax life in one of the best places in the world (business wise at least).
 

DavidS

Active Member
It's not for oligarchs, but rather a clever feature that gives you an option to decide if you want to make the UK your permanent home and acquire the domicile.

Long story short - before entering the country with purpose of staying (work/investors visa, etc) you can declare your existing assets as "clean capital" and freely remit it to the UK without any tax implications. You can also do it later, but be aware of keeping the income on these assets separated from the clean capital.

After you entered the country you have like 15 years to benefit from non-dom and every year you may at your convenience claim "remittance basis" for your tax report. If you don't claim it - you pay regular taxes on all your income (both UK and offshore). If you do - you only pay taxes on your UK income, but lose some basic tax allowances (which is OK as long as your non-UK income is substantial).

First 7 years it's "free" (you only lose your tax allowances), then it goes to 30k and more. Still makes sense if you are making hundreds of thousands.

As long as you play nice, don't control any foreign companies, it's a brilliant way to have a low tax life in one of the best places in the world (business wise at least).
Ah thanks for detailed explanation.

You seem to know a lot about it.

I absolutely have to live in UK to benefit from non-dom status, right?
 

manukahoney

New member
Ah thanks for detailed explanation.

You seem to know a lot about it.

I absolutely have to live in UK to benefit from non-dom status, right?
Now it's a question about tax residency, I don't know your current tax affairs, but to start with - if you want to use remittance basis, you need to be a tax resident. It doesn't mean to live in the UK all year long, actually you can become a tax resident spending as little as 45 days in a year.
If you want to get a citizenship eventually - then rules are a bit tougher.

Again, definitely recommend to get a good immigration/tax adviser, the UK law is at the same time perplexing and well documented, so an expert opinion is a must.
 

Konstanz

Entrepreneur
It's not for oligarchs, but rather a clever feature that gives you an option to decide if you want to make the UK your permanent home and acquire the domicile.

Long story short - before entering the country with purpose of staying (work/investors visa, etc) you can declare your existing assets as "clean capital" and freely remit it to the UK without any tax implications. You can also do it later, but be aware of keeping the income on these assets separated from the clean capital.

After you entered the country you have like 15 years to benefit from non-dom and every year you may at your convenience claim "remittance basis" for your tax report. If you don't claim it - you pay regular taxes on all your income (both UK and offshore). If you do - you only pay taxes on your UK income, but lose some basic tax allowances (which is OK as long as your non-UK income is substantial).

First 7 years it's "free" (you only lose your tax allowances), then it goes to 30k and more. Still makes sense if you are making hundreds of thousands.

As long as you play nice, don't control any foreign companies, it's a brilliant way to have a low tax life in one of the best places in the world (business wise at least).
What do you mean not control foreign companies? What are the risks for non-dom to control offshore companies for example BVI?
 
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