Worcestershire oligarchs (if there are any ) in tax poser.
GEORGE Osborne’s new oligarch tax is set to cause a headache for wealthy people in Worcestershire, according to tax expert Anita Stewart, partner at Bewdley firm DHJH Chartered Accountants, and she is urging them act now if they want to avoid a hefty bill in 12 months’ time.
Ms Stewart said the changes outlined in the Chancellor’s autumn statement will come into effect in April next year and will mean foreigners and expats in the UK will have to pay capital gains tax on their UK homes, when previously they avoided it. This follows the new residency rules announced last year which mean new arrivals can only be present in the UK for 45 days, rather than the current 90, if they are not to be considered a resident here for the purposes of tax. They clamp down on ‘expats’ and ‘oligarchs’ but also affect British people who live overseas but have property in this country, particularly if they are planning to sell.
There is now a three-part test – an automatic overseas test, an automatic UK test and a ‘sufficient ties’ test based on family connections that is meant to make it clearer whether or not someone owes tax in the UK. The change is part of the most significant amendment to UK tax residence rules in 100 years and is designed to give a greater deal of certainty to internationally mobile people over how much tax they owe in the UK. But it also reduces the advantages and options available for people to legally reduce their tax liability.
Ms Stewart added: “People are going to have to look closely at their assets before the new rules come into force. Some are already considering it as there is lots to think about – especially surrounding the number of days in and out of the country that they can be resident without being liable for tax. The grey areas are removed through the new three-part test but it remains a complicated process that more people here in the region should be planning carefully for. For example, to be certain of not having to pay capital gains tax, a property must be sold before the rule change takes effect in April 2015. That’s just one issue I know lots of people here in Worcestershire are beginning to worry about and what it may mean for their finances. It is simply vital that they seek professional advice now, rather than face an unexpected and hefty bill next year.”
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