The proposals set out in the further consultation on taxing non-domiciles¹ state that, in order to ‘support those non-doms who needed to adjust to the new deemed domiciled regime’, a one off rebasing is available in respect of those individuals becoming deemed domiciled in 2017.

The proposals further confirm that ‘individuals will be able, if they wish, to rebase overseas assets to the market value of the asset at 5th April 2017 with the result that any gain which accrued before April 2017 will not be charged to CGT in the UK. However, any further increase in the value of an asset between April 2017 and the date of disposal will be charged to CGT in the normal way’ and that ‘where an asset was purchased with clean capital, the entire proceeds from the disposal can be brought to the UK without triggering a remittance.

A UK resident non-dom who is becoming deemed-domiciled in April 2017 and who has paid the remittance basis charge (and not simply paid tax on the remittance basis) can therefore rebase any assets (e.g. shares personally held in a private investment company) which hold non-crystallised gains as at 5th April 2017. If those assets are then sold, the proceeds, so far as they represent clean capital and rebased gains (i.e. not any income or gains used to fund the purchase), can be remitted into the UK without charge.

Note that this only applies to individuals becoming deemed domiciled in 2017 but will not apply to individuals who become UK deemed-domiciled in any subsequent years.

It should also be noted that such a remittance, though tax-free, does make the funds remitted subject to a future charge to IHT as well as IT and CGT on future income and gains on an arising basis.