George Osborne, the Chancellor
 Image: Parliamentary copyright

The 2011 Budget Update

Tax Report from the SCF Group of Tax Planning Companies

Corporate Tax Rates Down but the Non-Domiciled Annual Duty is increased to £50,000,00 if one has been resident here for over 12 years!

George Osborne's 2011 Budget provides a mixed bag of good and bad from the perspective of many of our clients: The undoubtedly good news is that the Chancellor has proactively reduced corporate taxes to 27% from the beginning of April and 1 percent every year thereafter until the rate reaches 24 percent. In addition, the Chancellor has simplified many corporate tax rules, which must be good for the UK economy. The Chancellor has also rectified the former very negative rule permanent UK non-domiciled but resident individuals, would be taxed on remittances brought back to the UK for business investment rather than personal purposes. This change applies whether or not an individual has elected to pay, after having been in the UK for more than 7 out of the preceding 9 years in the UK, the annual tax in order to maintain their ‘historic’ privilege of being able to remit funds from abroad without exposure to UK taxation! The bad news, however is that the annual tax has been increased from £30,000.00 to £50,000.00 per annum for those non-domiciled individuals resident in the UK for more than 12 years!

 

As expected the Budget did not change the benefits of using Private Interest Foundations (PIF’s) but for how long?

As expected the Budget did not change the benefits of using Private Interest Foundations (PIF’s) as an alternative and much cheaper way of ‘shielding’ foreign assets for UK resident non-domiciled persons but the ability to use these remarkable ‘self-owning’ companies (supported by House of Lords case law) is not going to be there for ever so SCF strongly recommends that ALL such individuals seek advice as soon as possible if they want to avoid paying £50,000.00 per annum.

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