"When Rachel Reeves scrapped the non-dom status at last autumn's budget, she brought their trusts under the same regime as ordinary taxpayers, who pay an inheritance tax (IHT) of 6% of the total value of a UK or offshore trust every 10 years from its creation date. On Wednesday, the chancellor introduced a 5m cap on how much IHT can be levied every decade on non-dom offshore trusts created before the status was abolished."
"However, several tax advisers told the Guardian they considered that figure was likely to be too low, given the values contained within some trusts that could benefit from the tax break were worth hundreds of millions. Three advisers added that most high net worth people who were put off the UK by the removal of non-dom status would have already left, probably leaving their trusts beyond the scope of UK tax."
A budget change caps inheritance tax at 5m per decade for offshore trusts established by former non-doms before non-dom status was abolished. Trusts were moved under the same IHT regime as ordinary taxpayers, which charges 6% of the total trust value every ten years. The Treasury estimates a 30m revenue loss from the cap, while several tax advisers warn the cost could be higher because some trusts hold hundreds of millions. Many ultra-wealthy individuals deterred by non-dom removal likely left the UK, potentially placing some trusts beyond UK tax reach, and IHT remains a deterrent to wealthy migrants.
Read at www.theguardian.com
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