Background

In 2008 the then Labour Party Government enacted extensive changes to the tax treatment of non-domiciled UK residents (‘NDR’s). NDRs have historically enjoyed a favourable tax status – known as the remittance basis – which enables them to pay UK tax only on their UK source income and gains arising in a tax year, and any foreign income and gains which are remitted to the UK. The 2008 reforms contained a number of new measures including:

•The introduction of the £30,000 remittance basis charge for tax years commencing on or after 6 April 2008 on NDRs who had been resident in the UK in seven out of the nine preceding tax years.

•The creation of the concept of ‘nominated income’ (in order to claim the remittance basis and pay the remittance basis charge, NDRs were required to nominate some (or all) of their foreign income and gains of that year) and of complex and potentially punitive rules where nominated income is inadvertently remitted to the UK...