"Non-dom" tax: Is fund segregation relevant for income and gains accrued after 6 April 2025?

DaneInLondon

Under current rules, "non-doms" should separate foreign income and gains from "clean capital" to avoid creating "mixed funds". However, with the proposed FIG regime coming into effect in 6 April 2025, will it still be necessary to segregate these funds if income and gains accrued after this date can be remitted into the UK tax-free? Arguably not? Thank you for any insights.

Jeremy535897

These rules are in a state of flux with a government amendment promised shortly. The remittance basis will still apply to income and gains in the past, albeit potentially with a favourable rate for some years, so it would seem sensible to keep income and gains post 5 April 2025 separate from earlier income and gains.

poseidon1

DaneInLondon said:

Under current rules, "non-doms" should separate foreign income and gains from "clean capital" to avoid creating "mixed funds". However, with the proposed FIG regime coming into effect in 6 April 2025, will it still be necessary to segregate these funds if income and gains accrued after this date can be remitted into the UK tax-free? Arguably not? Thank you for any insights.

You may find a couple of posts I made to the thread link below of interest.

https://forums.moneysavingexpert.com/discussion/comment/81102593#Comment_81102593

What I specifically highlighted ( on 13 November ) is the proposed  Temporary Repatriation Facility (TRF )  to take effect from April which permits remittance of mixed funds at a special flat rate of tax of 12% ( for a couple of years ) and 15% in the third year. It was designed to address the considerable difficulties non doms experience in creating and maintaining 'clean capital' for remittance purposes and encourage sizeable remittances at low tax cost.

I understand the Chancellor is considering tweaking the TRF to make it more appealing having regard to the significant outflow of non dom millionaires from the UK since March last year.

However the tweaking  ( at the moment ) seems to be limited to extending the facility beyond the three years originally announced. Whether that by itself would  be enough to stem the non dom outflow is unlikely. For many non doms it is IHT on death on a worldwide basis which now sticks in their craw.