Over 150 guests and members of the business community gathered at the Palace Hotel last Tuesday to hear presentations from tax experts at leading trust and corporate services provider Equiom. Speakers covered topics relating to various tax changes coming into effect in April 2017 that could have a significant impact for Island residents with assets in the UK and touched on the Common Reporting Standard (CRS) and how it will affect Islanders.
The event was opened by Non-Executive Chairman of Equiom Solutions, Clive Stanford and began with a presentation by Equiom Solutions Managing Director, Helen Woods entitled ‘Born in the UK, returning to the UK’. Helen started with a recap of the Statutory Residence Test (SRT), explaining that for Isle of Man residents it is good news. She stated: ‘Previously there was inadequate legislation around those seeking to cease UK residence making it difficult to provide definitive advice. The SRT has since been introduced and provides more certainty on how those returning to the UK are assessed. In many cases it will enable individuals to spend more time in the UK than previously allowed.’ She went on to describe an individual’s domiciled status and upcoming changes that will affect this status.
Senior Tax Consultant Glenn Cassidy then outlined the new domicile rules. He spoke about an individual’s domicile status and how this can impact upon their exposure to IHT. He explained: ‘As of April this year, non-UK domiciled individuals will only need to be resident in the UK in 15 of the previous 20 tax years, as opposed to 17 of the previous 20 tax years, in order for them to become deemed domiciled for UK IHT purposes. Under the proposed new rules coming into effect from April this year, a deemed domiciled individual will also lose their capacity to be taxed under the remittance basis in the UK, which currently permits UK resident, non-UK domiciled individuals to shelter their foreign source income and gains from a UK tax charge to the extent that they are not remitted to the UK.’
Tax Director Kevin Renshaw addressed one of the most pressing topics for Islanders, the proposed UK IHT changes affecting UK residential property. Kevin explained: ‘From 6th April UK residential property and loans made to acquire UK residential property will be subject to IHT regardless of the owners’ domicile status or whether the property is owned by an offshore company. Equally, if the property is held within a trust, IHT may be charged upon the death of the settlor and on the occasion of a trust 10 year anniversary. Investors in UK residential property should review their ownership structures ahead of 6th April to see what potential IHT exposure may exist and consider alternative strategies to preserve the current IHT protection.’
Finally, Monica Dixie discussed the Common Reporting Standard (CRS), an international standard for the automatic exchange of information between governments in respect of tax residents in their jurisdiction. She outlined what individuals need to know about how their information may be shared across jurisdictions. She also covered how information will be transmitted to the Isle of Man Government from other governments in respect of tax residents who have accounts in other jurisdictions. She explained: ‘A lot of information about worldwide structures and investments, not necessarily relevant to tax affairs, may be disclosed. This could result in more enquiries being opened by tax authorities, something we’re expecting to increase in the future.’
The seminar concluded with a Q&A session and closing remarks from Clive Stanford.
Equiom Solutions provides tax and estate planning services to Isle of Man residents and businesses. The highly qualified and experienced team offers tax and estate planning advice and help with annual tax obligations, as well as outsourced tax compliance services for fiduciaries. For more information, visit www.equiomgroup.com.
Photo - Seminar speakers – Glenn Cassidy, Helen Woods, Clive Stanford, Monica Dixie and Kevin Renshaw.
