Book Review “Taxation of Foreign Domiciliaries” – Second Edition

This book is a “must have” for anyone involved in the field of advising on tax issues for non-UK domiciled individuals. One could quite rightly describe it as the “ Red Book”, as contrasted with the “Yellow Book”, or the “Orange Book” , both of which publications are well known to UK tax practitioners.

The layout is very clear and easy to use. There is an excellent index, to chapters in bullet point form, to legislation, to case law, and to Extra Statutory Concessions, as well as an extensive alphabetical index at the end, for people who can remember non of the above!

The easy layout means that you can dip into the book on any specific issues. But it is also possible to read the book from cover to cover like a novel, even without falling asleep, as the style is fairly brisk. Each matter is covered in a clear and concise manner; despite which, the book manages to reach 600 pages. None of the more practical technical tax planning arrangements, for example, extracting capital assets out of a trust settled by a non-UK domiciliary without any of the incremental tax charge, is really examined in any great depth. It also makes it quite plain at the beginning of the book this is not a book to be used for very fancy tax planning arrangements, but is a good basic text for understanding the underpinning on which non-UK domicilaries are taxed in the UK. There is a even a warning note to lay readers that they should always take professional advice in this area.

Chapter 7 on the Schedule D remittance basis is in fact the longest chapter at 66 pages. This is where there has been additional work since the first edition, for example, on assets held jointly by husband and wife and the remittance problem that was encountered in the Grimm v Newman case which related to remittances and professional negligence. The second edition also includes a new chapter on transfers of assets between and adding to trusts, and on marriages between a UK domiciliary and a foreign domiciliary – with some interesting comments on their joint banking accounts the Revenue Manual in this regard. And the new references to ITEPA, applicable from 2003/04 are updated throughout the book, which is most helpful.

The shortest chapter, of 4 pages relates, to the duties of disclosure to the UK Inland Revenue with regard to reporting requirements on the creation of a settlement and dealing with IHT accounts for deceased non-UK domiciled individuals. But probably my favourite chapter is the on “The Family Home and its Chattels”.

Whilst there are simple examples throughout the text, there are no comprehensive examples that might be of help to some readers. And, for persons reading this from overseas, no country by country comment is given, although special issues relating to US, Canada, Isle of Man, Ireland etc are dealt with in some aspects.

But all in all a very comprehensive book, which I enjoyed reading, and where I gained more insight on a number of areas which I encounter in practice everyday.

Debbie Annells , Director, Equity Trust Hong Kong.

Asian Legal Business December 2003