UPDATE ON INTERNATIONAL PLANNING ISSUES ROME


UK-resident non-doms: the new rules [ RICHARD CITRON ]


THE NEW RULES come into effect on 5 April 2017.


They will affect individuals not domiciled in the United Kingdom but resident there for 15 years. The onus is on the Revenue to show that an individual has acquired a UK domicile. Following the Autumn Statement on 23 November, draft legislation will go before Parliament. This is not a tax raising exercise – rather a response to political pressure. Non-domiciled taxpayers will be deemed domiciled from the sixteenth year. It will require six years of non-residence to lose a


deemed domicile. There will be an element of re-basing. There are some things that might be done before 5 April 2017 – for example, an excluded property trust, a unit trust or private investment company, creation of promissory notes, emigration – following new statutory residence rules, crystallising income and gains, re-basing UK-sited assets – which can have side effects, a s162 reconstruction, de-enveloping, and taking advantage of business investment relief.


International estate planning [ TIM GEORGE ]


THE INTERNATIONALLY-CONNECTED CLIENT presents various problems. Lifetime estate


planning is important and needs to fit with the relevant legal systems: the heir, deceased or assets may have different locations and may be governed by common law, civil law, or Sharia or other religious law. In the common law, domicile governs personal property and situs real property, whereas civil law looks at the nationality of the deceased. Forced heirship is a feature of civil law and Sharia law regimes – Sharia law invalidating non- permitted dispositions, but civil law conferring on aggrieved beneficiaries a right to compensation from the recipients of a non-permitted disposition – Louisiana and California having rules of their own. There are community of property regimes in civil law jurisdictions: in the US, it is to be found in California. The advisor needs to consider whether a single-situs or multi-jurisdictional will is appropriate. Brussels IV attempts to simplify the treatment of estates of habitual residents. Consideration should be given to relocating assets, inserting an intermediate entity and ensuring there is strong evidence of domicile. There are drafting considerations in relation to scope, revocation, definitions, and choice of law.


The advisor needs to consider whether a single- situs or multi- jurisdictional will is appropriate


The new Swiss tax regime for corporations


[ HEINI RÜDISÜHLI ]


COMPANIES PAY 8% FEDERAL TAX. Cantonal tax rates vary. There is also a capital tax. Holding companies


can benefit from participation relief and pay no cantonal tax. Commodity trading companies have a low rate of tax on foreign profits. Under pressure from the EU, Switzerland in 2012 launched the Corporate Tax Reform III, which is expected to come into force in 2019. All companies will be subject to ordinary taxation. There are transitional provisions, which can result in a


five-year tax holiday, a notional interest deduction, a cantonal patent box (requiring complex calculations) and an R&D ‘super deduction’ of 150% − with a maximum of 80% tax relief in any year. The Cantons are afraid that they may cease to be competitive and are presently reducing their tax rates. Cantonal capital tax adjustments are being considered.


THE ITPA GREEN BOOK 2018 www.itpa.org


019


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116