08 July 2020 - Events
With effect from 4 August 2014, HMRC changed, without notice, their stated position with respect to the treatment of commercial loans secured by foreign income or gains. From this point on, money brought to or used in the UK under a loan facility secured by foreign income or gains is to be treated as a taxable remittance in addition to any service payments. Prior to this, HMRC guidance was that only repayments or payments to service the loan could be treated as taxable “remittances” if made out of foreign income / or gains.
HMRC contend that the change to the guidance is not retroactive as resident non-doms who relied upon it have until April 2016 effectively to unwind their present arrangements and, if necessary enter into new arrangements. Representatives of various professional bodies met with HMRC/HMT officials on 11 September to discuss the rationale for the change and the potential difficulties that would be suffered by numerous individuals who had relied upon the guidance (as it turns out) to their detriment.
HMRC have indicated an intention to issue FAQs to address technical issues arising from foreign income and gains being used as collateral and the impact of the change. HMRC invite advisors who have clients who are encountering any real difficulty as a result of this change to let them know.