How Does The UK's Autumn 2024 Budget Affect Offshore Trustees?

The UK's Autumn Budget confirmed that the concept of domicile will be dropped from the UK tax system. Instead, like many other countries, we will look solely at residence (with no changes to the existing Statutory Residence Test).

This means we will also be abolishing the concept of UK resident but non-domiciled (known as being non-dom) and removing domicile as the basis for UK inheritance tax (IHT).

Currently, IHT applies as follows:

• To the worldwide assets of a UK domiciled person
• To the UK situated assets of a non-UK domiciled person

This means currently a non-dom can put their non-UK assets into an offshore trust, and provided they were non-dom at the time, the trust will protect those assets from IHT even if they become UK domiciled (or deemed domiciled) later.