Mr Flowers is UK resident and has been for the past 16 years. Under the pre 5 April 2017 rules he was considered non-domiciled for the purposes of taxation. Following the changes in the rules from 6 April 2017, he is now considered “deemed domiciled” for all taxes.
Firstly he is no longer able to claim the remittance basis on his tax return for 17/18 tax year as he has been resident in the UK for 15 out of the previous 20 tax years. This means that going forward he needs to provide us with details of all of his worldwide income and gains. This is a significant change and will require assistance to be able to provide all of the relevant information, as he has never had to do this before.
Given the information sharing that now takes place between many jurisdictions under the Common Reporting Standards (CRS), if Mr Flowers is not fully compliant and does not provide all of the relevant information, he is likely to find himself the subject of an HMRC enquiry in a future year.
He will also receive an uplift to 5 April 2017 for capital gains tax purposes for all of his offshore assets. This needs documenting so that if any of these assets are sold in the future, there is a record of the uplifted cost, so he only pays tax on the uplift. We have to make sure this is picked up in future years.
Lastly, all of his worldwide assets will be within the charge to IHT. It is therefore important to start planning for IHT and take any steps necessary to minimise the impact of this upon his family wealth and conversations have already begun.