Planning for the foreign domiciliary: 3rd edition
Most Tax Practitioners will recall that clients who have a non-UK domicile are taxed on the remittance basis, but which of the six variations of the remittance basis applies to the income or gain in question? If you did not realise that there could possibly be six variations on what seems at first sight to be a simple concept then Planning for the Foreign Domiciliary.- 3rd Edition, published by Key Haven Publications pic, is the book for you.
The UK system of taxing residents who have a foreign domicile only on the wealth they make in the UK or bring into the country has long been seen as very favourable to the individuals concerned. Although surely overdue for review this ramshackle system remains, possibly because it plays a significant part in attracting investment through wealthy entrepreneurs to these shores. With the UK now having some of the lowest personal tax rates in Europe, there is an increasing demand for authoritative guidance for foreign domiciliaries who are resident here on a temporary or permanent basis.
In this new edition of the book, James Kessler and Peter Vaines address the apparently conflicting rules for taxes on income, gains and inheritance tax, and highlight the many anomalies in the law as it affects UK residents who have, or seek to retain, their foreign domicile. The references to decided cases are restricted to only those most relevant to the commentary and used where a particular point requires illustration, which keeps the text short and easily digestible.
The 14 chapters are divided into subject areas and sub-topics, almost as if the book was designed for electronic publishing in mind. The breakdown of the subject areas into topic and sub-topics is fully listed in the contents section which allows the reader to scan all topics before delving into the book itself. This feature makes up for the rather scant index.
The chapters flow in logically from a precise analysis of the law of domicile and residence, through the implications for income tax on employment income and investment income, to the more complex construction of the anti-avoidance provisions concerning the transfer of assets abroad. These provisions are given two whole chapters to themselves, which is entirely justified given the complexity of this area of legislation. There are also two chapters on capital gains tax, the second of which dissects the capital gains tax provisions as they relate to trusts with such clarity that the reader is left wondering how he could have failed to understand the principles before.
A new addition to this third edition is a chapter entitled; 'Who is the settlor?' This may appear to be a question with a clear answer, but as with many things in the looking-glass world of offshore trusts the obvious is not necessarily the correct answer and the authors point out the traps for the unwary. The book is completed with chapters dealing with impact of domicile on inheritance tax including the territorial exemptions and reservation of benefits.
This book is written with the busy practitioner in mind who needs to find the answer for his client together with practical tips on the Inland Revenue's view all in one place. The inclusion of relevant extracts from the Inland Revenue Manuals is especially useful, as the authors have commented on the validity of each Revenue opinion, rather than accepting the manuals as gospel.
The references to other publications such as Offshore Tax Planning are not so welcome, unless the reader also happens to subscribe to that particular joumal. The only other minor criticism of the book is the scarcity of worked examples, which have increased in comparison to the second edition, but are still fairly thin on the ground in some
areas.
In conclusion this is an excellent book, written for the expert but with the issues explained so clearly that a non-tax person could follow the arguments. Anyone who is in the position of advising non-domicile individuals or trusts should read it from cover to cover and may even consider recommending, it to their clients!
Kessler, J. and Vaines, P. 1999.
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