Crack down on non-doms

Individuals who live in the UK but who have a foreign domicile, (sometimes called 'non-doms' because they are non-UK domiciled), have often been able to structure their employment so that they avoid paying UK income tax on the part of their earnings which relates to duties performed overseas.

The Inland Revenue has recently announced that it intends to crack down on these 'dual contract arrangements'. In the future it will not accept such arrangements unless the non-dom can clearly show that there are two genuinely seperate jobs. That will be hard where the two employers are connected (e.g. a UK parent and an overseas subsidiary). Where a single job has been 'artificially' divided into UK and overseas duties, tax relief is unlikely to be allowed.

If you are now concerned that your dual contact arrangement may fall foul of the new guidelines, or you believe that you or your employees may be eligible for a dual contract arrangement then please contact:

Daniel Naftalin
Tel +44 (0)20 7440 7247
daniel.naftalin@mishcon.com