It is now possible, with effect from 6 April 2012, for taxpayers who are resident but non domiciled in the UK and who pay tax on the remittance basis to bring their offshore income and gains into the UK free of tax, provided that the remittance is made for investment purposes. The investment must be made in a qualifying company – basically a private trading company or the holding company of a private trading company. At the moment the relief does not apply to investments in other vehicles, such as partnerships, but HMRC is considering extending it to do so.
The fact that the taxpayer is employed by the qualifying company is no bar to the relief but there are other detailed eligibility conditions to satisfy if it is to be available, and when the investment is sold the proceeds must either be taken out of the UK or reinvested in another qualifying company.
This relaxation will be of real interest to anyone who wishes to invest in the UK in a way which complies with the eligibility criteria, but our experience to date is that relatively few clients seem to want to make the sort of investments which are currently permitted.
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