Category Archives: investments

Changes to the way Non Doms are taxed

22nd August 2016

Last week the UK government released a consultation document providing additional details on the proposed changes as to how UK resident non-domiciled individuals are to be taxed.

The consultation confirms the government’s intention to reform the UK tax rules and bring the tax position of UK resident non-doms more in line with that of UK domiciled individuals.

The consultation confirms the government’s intention to reform the UK tax rules and bring the tax position of UK resident non-doms more in line with that of UK domiciled individuals. The consultation has also provided some indication as to how the government intend to treat offshore companies and trusts going forward, providing some key detail that was largely missing from the previous consultation in September 2015.

Overall, it remains clear that the government will implement a “deemed domicile” rule across all taxes for those non-domiciled individuals who have been UK tax resident for at least 15 of the 20 previous tax years. The consultation confirms that any “split years” of residence will count towards the 15, as will any years of tax residence as a minor. This means that non-doms living in the UK will only be able to benefit from sheltering their non-UK income and gains from UK tax for up to 15 years. Once an individual becomes deemed domicile, they will be subject to tax on all personally held income and gains received in a tax year, irrespective of whether they were derived from UK or overseas sources.

However, the consultation provides greater (and indeed welcome) detail on two important points that were introduced by the March 2016 Budget but lacking substantial detail at that time.

The consultation confirms the ability of a non-domiciled taxpayer to re-base their non-UK assets in April 2017, meaning that any growth in value of those assets prior to April 2017 can be realised in the future without a charge to UK tax. Irrespective of this confirmation, we caution that it remains unclear as to how this rule will be applied where the assets have been purchased initially with untaxed relevant foreign income. In other words, although the growth in value will not be subject to capital gains tax on the disposal, there may be a tax exposure if the proceeds of the asset sale are remitted to the UK.

Further information on the future taxation of offshore trusts has also been provided. Non-dom taxpayers will be relieved to see that the proposed “trust benefits charge”, which sought to apply a tax to trust distributions without reference to the source of those distributions, has been dropped. Instead the government intend to modify the current rules on how trust income and gains are taxed in order to bring them into line with the introduction of the extended deemed domicile principle. The good news for non-doms is that it should remain possible to structure offshore trusts to allow access to clean capital and capital gains at lower tax rates; however, it is likely that a consequence of this change in approach will be the introduction of even more complex anti avoidance legislation.

There is also some further good news for non-doms, in that the government propose to provide concessions allowing mixed funds to be segregated for future use. The intention here will be to allow non-doms to split income and gains from clean capital held in the same bank account, such that they can move amounts to new accounts and segregate them going forwards. It is proposed that this window of opportunity will only be for the 17/18 tax year. This will be good news for trustees and bankers as well as clients, but at this stage we would caution that more detail on the proposals will be required before any action is taken.

As a final point to note, proposals relating to “boomerang domiciles” will be going ahead, but the government will allow a grace period of two tax years for returning domiciles. That being said, the government do not intend to allow returning domiciles to utilise the remittance basis during that grace period, so in effect this grace period is likely to only impact the tax position of any offshore structures these individuals hold interests in.

In general we consider the proposals contained within the consultation will provide non-doms with some guidance on how they may be taxed post April 2017; however we would point out that the proposals remain as merely a consultation and we are still without any draft legislation.

It will be important for all non-doms to urgently review their tax affairs. The changes to the taxation of trusts and the availability of a re-basing election mean that for some assets personal ownership is the better route and for others trust ownership. Restructuring will be necessary. Which route is preferable will depend on a number of factors including, the cost of the asset, whether the asset was bought with clean capital, the market value at 5th April 2017, the expected future sale price, whether the remittance basis charge had been paid, the date that the non-dom will become deemed domiciled and how the non-dom pays for his UK and non-UK lifestyle.

State Pension triple lock under threat after Brexit

5th August 2016

Being members of the European Union (EU) has been good news for Brits retiring to other member states, as they have the same pension rights as those who reside in the UK.

However, this may be about to change, as this situation cannot continue in its present form and the 12 million retired Brits living in other EU states are left with an uncertain future in terms of what a Brexit will mean for their UK State pension benefits.

Although the UK state pension can be paid anywhere in the world, qualifying for annual increases under the triple-lock guarantee depends upon where you emigrate. The triple-lock was originally introduced by the coalition government in 2010 and ensures that state pensions rise in line with the higher of 1. Inflation, 2. average earnings or 3. 2.5%.

People who retire to countries within the European Economic Area (EEA) are currently entitled to benefit from the triple-lock. This includes all those resident in countries in the EU plus Iceland, Liechtenstein and Norway, which are part of the EU’s single market although not full members of the EU. Switzerland is neither an EU nor EEA member but is part of the single market, therefore Swiss nationals have the same rights to live and work in the UK as other EEA nationals.

Parts of the world like United States of America and Barbados have various social security agreements with the UK that enable expats to qualify for the annual increases to their state pensions. However people who are retiring to countries that have no social security agreements in place with the UK or Canada and New Zealand that have different ones, do not qualify for state pension increases, so they are effectively frozen at their initial rate.

There is much uncertainty around what will happen to the triple-lock after Brexit, as it cannot be assumed everything will remain as it is today. The main concern for British expats is that they may be joining the ranks of those with frozen state pensions once the UK finally leaves the EU.

Ultimately the UK government are likely to look after those still living in the UK before they start considering those living outside the UK, so it would be no surprise to see the rules to the state pension triple lock being tweaked somewhere along the line, so that it only applies to UK residents.

While an increase of 2.5% may not sound much to get excited about, a 65 year old receiving the flat rate state pension of £155 per week who lived 20 years would miss out on £50,000 of state pension income in retirement if they got no pension increases.

It is estimated that the treasury already saves around £500m per year from state pensioners that live in countries where they are not entitled to the triple-lock, so if they can see the opportunity to exclude another swathe of state pensioners from the triple-lock I’m sure they’ll take it.

The recent fall in sterling is also causing expats some issues, who are now getting fewer Euros with their sterling state pension money.

I guess this is just another potential unforeseen consequence of Brexit. Lets hope our negotiating team in Brussels do a good job for us.

Changes to the way onshore & offshore bonds are taxed in the UK

6th July 2016

At the March 2016 Budget, the UK Government announced its intention to change the tax rules applicable to life assurance policy part surrenders (taking money from a policy) and part assignments (gifting or selling part of a policy) in order to prevent taxable gains arising on these events that are disproportionate to a policy’s true economic gain. Part assignments being less common, attention is likely to centre on part surrenders, which are the focus of this article.

A Consultation Document was issued on 20 April 2016 and sets out three options for consideration and comment. In our view, the UK Government’s commitment to reforming and simplifying the rules for clients reaffirms the reputation of life assurance as a resilient long-term planning tool for UK resident clients utilising the benefits (mainly that of income tax deferral on any income or gains) offered by onshore as well as offshore bonds.

Why is a change to the taxation of part surrenders necessary?

Under the current rules, investors who make large withdrawals, particularly in the early stages of their policies, can find themselves liable to pay significant amounts of income tax when they least expect it. Under current legislation, a policyholder can withdraw the equivalent of up to 5% of premiums per policy year without any immediate liability to tax, even if the policy is in gain. However, once this 5% allowance is exceeded, any part surrender is treated as crystallising a gain regardless of underlying asset performance.

Most onshore and offshore bond providers issue policies in clusters of segments (multiple policies) as a matter of course. This enables investors to totally surrender a number of whole policy segments rather than making a part surrender. The advantage to policyholders is that the chargeable event calculation for determining the taxable amount on a total surrender recognises the true economic gain as opposed to an artificial sum representing the excess over the 5% withdrawal allowance.

The distinction in tax treatment between part and total surrenders continues to catch some investors out, generating what the First-tier Tribunal of the Tax Chamber has described as “an outrageously unfair result”. As such, we welcome the current proposals.

Do the proposals remove the tax-deferred withdrawal allowance?

No. The Consultation Document describes the maintenance of a tax-deferred withdrawal allowance as a “desirable outcome”. Two of the three options preserve the existing 5% allowance, while the remaining option increases it to 100%.

What are the three options?

Option 1: Taxing the Economic Gain – this would retain the 5% tax-deferred withdrawal allowance but bring into charge a proportionate fraction of any underlying economic gain whenever an amount in excess of the 5% was withdrawn.

The method given in the Consultation Document for calculating the gain is to deduct a proportionate amount of the premium paid from the amount withdrawn. As a result, the gain arising would always be a fraction of the policy’s true economic gain and no gain would be recognised unless the policy was in profit.

A final sweep-up calculation would be made on a total surrender, as is the case under current rules, where previously charged gains would be deducted from the taxable value.

Option 2: The 100% Allowance – no gain would arise until all of the premiums were withdrawn. This would convert the current 5% tax-deferred allowance to a 100% tax-deferred allowance, and would again ensure that only true economic gains were taxed.

Once all premiums had been withdrawn from a policy, any subsequent withdrawals would be treated as gains and taxed accordingly.

Option 3: Deferral of Excessive Gains  – this would maintain the current method for calculating gains but would introduce a cap so that if the gain exceeded a pre-determined amount of the premium (the Consultation Document proposes a cumulative 3% for each year since the policy commenced) then the excess would not be immediately charged to tax.

The cumulative 3% would act as a form of safety net to limit the taxable gain each policy year. The gain arising from a subsequent part surrender would be increased by the amount of the deferred gain from the earlier event. If the total gain exceeded the pre-determined amount, the excess would be deferred again.

A sweep-up calculation would occur on a total surrender, by which premiums and gains would be deducted from the total of all policy withdrawals and deferred gains would be taxed.

Which option is best?

Option 2 – the 100% allowance – is, in our view, the simplest and most attractive option for clients. Although option 1 is similar to the calculation method used in a number of European countries, both this and option 3 require more complex calculations and, as the Consultation Document acknowledges, may involve greater administrative costs for individual policyholders. All of the options retain a tax-deferred withdrawal allowance while making sure that large part surrenders do not generate artificial gains.

What are the next steps?

The 5% tax-deferred withdrawal allowance, introduced in 1975, has long been one of the most appealing features of onshore & offshore bonds to UK residents. However, there has been growing speculation as to whether the Government remains committed to maintaining it. As such, in addition to announcing much needed protection from large and potentially unexpected income tax liabilities, the Consultation Document is likely to provide welcome reassurance to prospective investors that they can continue to access the value of their investments in an efficient manner.

The consultation period closes on 13th July. The Government will then review representations and expects to publish a response within 12 weeks. Draft legislation based on the preferred option is due to appear in Finance Bill 2017.

Tougher Restrictions Proposed for Non Doms

2nd October 2015

Tougher restrictions for non-domiciles beyond those already announced in the summer Budget are set to come in following the non-domicile consultation paper which was published yesterday (30 September).

Once someone becomes UK domiciled, the tougher restrictions will make it harder for a person to lose their UK domiciled status after they leave the country.

At present, if a non-dom has been in the UK for 17 out of 20 years, they become liable to UK inheritance tax on their worldwide assets.

Under current rules, if they leave the UK and die within three years of leaving, the estate will still be liable to UK inheritance on their worldwide assets.

However, under new proposals put forward in the consultation, the 17 out of 20 years reduces to 15 out of 20 and the three year inheritance tax tail has been increased to at least six years.

According to the new proposals, people will not lose their UK domicile status until “the later of the date that they acquire a domicile of choice in another country, or the point when they have not been resident in the UK for six years”, meaning that the IHT tail could be much longer depending on how quickly they acquire another domicile of choice.

Additionally, the tougher restrictions will make it harder for non-dom spouses electing to be UK domicile to lose the UK domicile status once they leave the country.

At present, under legislation introduced in 2013, a non-dom spouse, of someone who is UK domiciled, can elect to become UK domiciled, making it possible for estates to be passed between spouses completely free of IHT.

Once the spouse becomes UK domiciled that decision is irreversible whilst they live in the UK.

At the moment, if they leave the UK they remain UK domiciled for 4 tax years. However, under these new proposals, the four year time frame will increase to six years.

The new proposals demonstrate the government are taking a tougher stance both on non-domiciles and on UK expats returning to the UK.

“Non-domiciles who have been in the UK for 15 or more years out of 20 need to make alternative plans or be deemed domicile for UK IHT purposes and lose the option to choose the remittance basis of taxation.

“The increase in the time it takes to lose the UK domiciled status is also a key consideration as anyone who dies within six years of leaving the UK will suffer IHT on their worldwide assets.

“Those born in the UK, but have been domiciled in another country, also need to ensure they seek financial advice before they return to the UK.

There are plenty of alternatives for non-doms if they are not able to claim the remittance basis anymore or just hate paying the annual remittance basis charge to HMRC.

Deferring liability to income tax whilst you are a UK resident might be an alternative strategy, as opposed to paying the remittance basis charge each tax year. There are several vehicles available that would allow a non-dom to fall under the arising basis of tax whilst deferring any tax on offshore savings/investments held offshore until such time as they move to another country with a lower or more favourable tax regime.

If you would like to learn more then please feel free to contact us at or call us on 0207 458 4588.

Relief for Non Doms

8th May 2015

It will come as great relief to many of our non dom clients, that Labour’s sweeping proposals to reform the tax regime for foreign domiciliaries or “non-doms” will now be quashed, at least for another five year Parliamentary term.

For the next Parliament at least, non-doms can continue to avoid paying UK taxes on un-remitted foreign income and gains by claiming the “remittance basis”.

Long term non-dom visitors will still be able to claim the remittance basis, but from 6th April this year it has become more expensive. Non-doms who have been UK resident in 7 out of the last 9 years will continue to pay a remittance basis charge (“RBC”) of £30,000 per year. However, the fee will increase to £60,000 for those persons who have been UK resident in 12 out of the last 14 tax years and £90,000  for those persons who have been UK resident in 17 out of the last 20 tax years.

Recently, HM Revenue & Customs has consulted on changing the rules on claiming the RBC, from an annual election to an election which lasts three years. This means that the RBC is guaranteed to be paid three times. However, careful tax planning using offshore bonds and other offshore financial products can mean that the RBC need not be paid. Contact us for more details.

We should also be mindful that during the run up to election day the former Chancellor, George Osborne, announced that the Conservative Party was also considering its own (albeit considerably less drastic) reforms to the existing non-dom rules.

Although very little detail is currently available, most sources suggest that any new policies are likely to be aimed at “weeding out” claims to foreign domicile status that are perceived to be less meritorious.  In particular, it is thought that changes could impact individuals who were born in the UK and have lived here all of their lives but, under the current rules, have “inherited” non-dom status from their father at the time of their birth.

These proposals would require amendment to the rules which determine an individual’s domicile of origin (or domicile of dependency), both of which are currently determined by reference to a significant body of case law.  At present, there is no statutory definition of domicile but this would presumably change if the Government moves ahead with these proposals.

In recent years, proposals to change the non-dom regime have been accompanied by a consultation period.  This usually gives advisers and their clients a clearer idea of how the legislation will be amended, and also provides an opportunity for interested parties to comment.  Therefore, we would recommend that individuals who may be affected take a “wait and see” approach and avoid taking any action until more is known.

Once more detail is available, it may be sensible for a number of taxpayers to revisit their non-dom status and seek professional advice on this.  In cases where there are legitimate concerns over the ability to claim non-dom status, under the new rules, it is likely that there will be some window of opportunity for well-advised taxpayers to restructure their affairs as appropriate.

Offshore bonds get £5k tax free savings boost

29th April 2015

Offshore bonds have been given a double tax boost. Changes to how savings income is taxed will mean a greater number of offshore bond savers will pay no tax on their bond gains.

The twin measures will first see the savings rate tax band extended to £5,000 and the tax rate cut from 10% to zero from April 2015. And from the following April, a further £1,000 may be taken tax free under the new personal savings allowance. Which would mean that in total someone with no other income could realise gains of £15,600 from an offshore bond tax free in 2015/16 and £16,800 from 2016/17.

Who gets it?
These changes only apply to savings income. This includes interest from banks, building societies and non- equity unit trusts/OEICs, as well as gains from offshore bonds. It doesn’t apply to dividends or gains from onshore bonds.

Crucially, the tax free savings rate band is removed where someone has earned income of more than £15,600. This includes pension income in addition to salary or self-employed profits.

To get the most of the tax free allowances may require careful planning and timing. This is where the unique features of an offshore bond can aid tax planning, especially where a client is able to manipulate their income or where the bond (or segments of it) can be assigned to a non-taxpayer.

Income and gains within an offshore bond roll up gross within the tax wrapper and only become taxable when there’s a chargeable event. Tax deferral can be extremely attractive to those who pay tax at the higher rates. This is especially true should they expect to become basic or non-taxpayers in the future, perhaps in retirement.

Timing these chargeable events to coincide with a year in which little or no other income is taken can mean that any gains escape tax completely. And the new pension freedoms will see a greater number of people able to turn their retirement income on and off when they need to.

Bridging the retirement income gap
Some retirement incomes aren’t as flexible. State pensions and benefits from final salary schemes, for example, once in payment will pay a fixed amount for life and cannot be stopped and restarted. And these can eat into the tax free allowance for a persons savings income.

But there can be a window of opportunity before any fixed incomes commence. And using the bond like a bridging pension can have benefits.

Deferring State or Final Salary pensions can create tax years where no income is being taken. Surrendering part of the offshore bond to realise any accumulated gains can replace the lost income. If that chargeable gain falls within the combined personal allowance and savings rate band, then the gain will escape tax. And in addition, deferring both Final Salary & State pension will mean that the fixed income you eventually receive will have increased.

Not everyone will be able to defer their retirement income to get gains out tax free. But it may be possible to assign the bond to someone who pays tax at a lower rate.

Assigning the bond or individual segments will shift the taxation onto the new policy owner. This can be a valuable planning opportunity for spouses and civil partners especially if the new owner may be a non-taxpayer.

Also it can be a great way of helping with a child’s or grandchild’s university fees.

Bond segments can be assigned to the student who is likely to be a non-taxpayer if they’re in full time education. Provided gains are kept within the £15,600 allowance, they won’t be taxed.

Over a three year course, that’s up to £46,800 in chargeable gains which can be taken free of tax. That’s an extra £13,500 compared to the equivalent CGT tax free allowance (£11,100 2015/16).

And remember, the proceeds received could be much more than the gains made, potentially providing the student with more than enough to pay their way through university.

More to come….
The Budget announced the introduction of a personal savings allowance from 6 April 2016. Unlike the savings rate band where only those with little or no earned income can benefit, the allowance is only removed once income from all sources exceeds £150,000. This means everyone who isn’t an additional rate taxpayer will receive some of the interest from their savings tax free.

The first £1,000 savings interest will be tax free. This amount reduces to £500 for higher rate taxpayers. That means £40,000 on deposit and earning 2.5% a year will be tax free for a basic rate taxpayer saving them £200 in income tax. A higher rate taxpayer would be able to hold £20,000 on deposit in the same account and the tax saving will be the same.

But it also means that most offshore bond savers will get some of their gains tax free. And in essence it increases the amount that can be withdrawn each year without incurring a tax charge. In addition to the 5% withdrawals, a basic rate taxpayer could take a further £1,000 without paying any tax on the withdrawal.

Offshore bond withdrawal errors may be reversible

13th April 2015


According to an article in the trade magazine ‘International Adviser’ on 9th April by Richard Hubbard, savers who inadvertently incur a heavy tax bill by drawing down funds from an offshore bond in a tax inefficient manner may be able to apply to the courts to reverse their decision, according to a recent legal decision.

In the ruling on a case known as Lobler vs. HMRC,  the court decided that if the mistake was sufficiently serious it could put the individual back to the same position they would have been in had the most efficient withdrawal method been selected originally.

“The ruling could make it possible, where circumstances allow, for those individuals to rectify a mistake which has cost them tens of thousands in tax,” said Rachael Griffin, financial planning expert at Old Mutual Wealth.

“It is also possible this ruling in the Upper Tribunal could pave the way for a change in the chargeable event legislation,” she said.

The ruling applies to both onshore and offshore bonds, which are collectively known as investment bonds, and will really only be useful where large sums are involved.

Investment bonds are generally issued as a cluster of individual contracts, and savers can usually withdraw up to 5% of the original investment tax deferred each policy year for up to 20 years, which effectively allows for a return of capital. Withdrawals over 5% can be taken in a policy year but this may be taxable.

The withdrawals can be made in one of two ways: withdrawing across each of the individual policies (part surrender); or selling one or more of the individual policies in order to reach the value of the withdrawal required.

In the Lobler case the saver decided, without taking financial advice, to withdraw his money from his Zurich Life investment bond in two large lump sums using the partial surrender option, incurring a huge tax bill.

In our opinion, it is crucial that investors are fully aware of all potential options for withdrawing monies from offshore and onshore bonds and they need to understand any potential tax consequences of the various options, so as to make an informed decision on the option they finally decide to choose.

Taking professional advice from ourselves at Mark Dean Wealth Management ensures individual’s take withdrawals from an investment bond in the most tax efficient manner possible. However, it is not uncommon for customers to process a surrender themselves and inadvertently create an unnecessary tax liability.

Non-Dom Tax Status under Scrutiny

8th April 2015

The Labour Party have announced today that they intend to overhaul the UK Resident Non-Domicile Regime if they win the next general election.

The announcement places the UK Res Non-Dom debate right at the heart of the General Election and “tax fairness”. It is unclear what the final proposals are and the speeches of the Labour Leader and the Shadow Chancellor have shed limited light on this. We suspect this is deliberate as they will need to work out the detail and also gauge reaction from the City as well as the public. That said, the brief proposals are the most radical that have ever been proposed and threaten London’s position as a financial centre. It will already mean clients potentially coming to the UK will need to consider deferring until after the General Election on 7th May and those already here plan for an exit with a potential 2 year window following the election of a Labour Government.

UK resident but non-UK domiciled individuals have, for many years, enjoyed a beneficial tax position in the UK. Under the current system, those that are resident (i.e. living) in the UK, but not UK domiciled, can elect to be taxed in the UK under the remittance basis of taxation. This enables such individuals to pay UK tax on their UK source income and gains and only on their foreign source income and gains that are “remitted” into the UK, but unlike those resident and domiciled in the UK, they can legitimately avoid paying UK tax on their foreign income and gains kept offshore.

The proposals put forward so far are:

•The Non-Dom UK tax rules will be abolished (and anyone permanently residing in the UK would be liable to pay UK tax on their worldwide income and gains, but this needs to be clarified);
•There will be a new rule for temporary residents (persons who are only resident in the UK for a short period, such as people seconded to the UK on business or to study), so that they would only be taxed on their UK source income and gains. This “temporary period” will be the subject of a consultation but is expected to be up to 4 or 5 years; and there would be a “transition period” of 2 years to allow UK Res Non-Doms to organise their affairs.

The scope of the proposals will need to be confirmed, however, once the election is over and any legislation published in draft. It may be that  Labour’s announcements will be tempered slightly and they will seek to make radical changes to the UK Res Non-Dom Regime similar to those brought about by the former Labour Government in 2008.

In the 2007 pre-Budget Report, the former Labour Government announced a number of significant tax changes to the UK Res Non-Dom Regime, many of which were enacted the following year in the Finance Act 2008.  The Finance Act 2008 saw the introduction of the remittance basis charge, changes to the remittance basis rules (and the meaning of “remittance”) and changes to the UK taxation of offshore trusts (where previously UK Res Non-Doms could roll up gains in offshore trust structures free of any charge to UK tax).

However, there were a number of other proposals which had been put forward which were either watered down or abandoned during the parliamentary process and it remains to be seen whether or not these measures will be raised by Labour again (if it does not completely overhaul the UK Res Non-Dom Regime) or picked up by other political parties.

For example, the original draft legislation of the Finance Act 2008 had contained notification rules whereby a UK resident but non-UK domiciled individual who had contributed funds to an offshore trust would have been required to notify the UK Revenue of the trust, even though this information may not have been directly relevant to a UK tax liability.

Another possible measure which could be introduced is a “deemed domicile” rule (similar to that for inheritance tax) where long term UK Res Non-Doms will lose the right to the remittance basis after a period of time. Under the current “deemed domicile” rules, which only applies to UK inheritance tax, UK Res Non-Doms who have lived in the UK for 17 out of the last 20 UK tax years are subject to UK inheritance tax on their worldwide estate (whereas UK Res Non-Doms who are UK resident for a shorter period of time are only subject to UK inheritance tax on their UK estate).

Proposed Tax Reductions & New Exit Tax In Spain

1st October 2014

The Spanish government has announced proposed tax reforms aimed at boosting economic growth by reducing taxes. Following a period of public consultation these

proposals come before the Spanish parliament this month (October 2014), with the final agreed measures entering into force on 1 January 2015.

The government’s proposals would see income tax rates reduced with a 45% top rate. However, the income threshold to reach the new marginal maximum would be reduced significantly from €175,000 to €60,000.

The savings income tax rate would be reduced from 27% to 24% in 2015 and then to 23% in 2016. The savings income threshold would be increased from €24,000 to €60,000.

Wealth tax and inheritance tax are not included in the proposed reforms.

A new exit tax is also proposed which, if approved, would mean that from 1 January 2015 Spanish residents moving their tax residence outside the EU or EEA would be subject to a capital gains tax on any unrealised gains in their investment holdings.

This new exit tax would apply to individuals who have been tax resident in Spain for at least five of the last ten years and who own more than €4m in ‘relevant assets’ or who own more than 25% of a company worth over €1m. ‘Relevant assets’ would comprise investment funds and listed or unlisted shares, but not other assets such as bonds, real estate or life insurance.

These measures increase the attractiveness and tax-efficiency of wrapping investment funds within an EU cross-border life insurance policy while resident in Spain.

What is the difference between a Notary Public and a Solicitor Empowered to Commission Oaths?

18th September 2014

It is often confusing as to whether you need a Notary Public or Commissioner for Oaths particularly when you need some documents certified.

It all depends upon the nature and purpose of the documents you need certified and the country in which the documents are required.

A Commissioner for Oaths is a person commissioned by the Lord Chancellor to administer oath or take any affidavit for the purposes of any court matter in England. All solicitors that hold a valid practising certificate may also perform this function providing oath or affidavit to be used in a court in England.

It is also worth bearing in mind that a Commissioner for Oaths or a solicitor cannot administer any oath or affidavit to be used in a court in England if they are acting for any of the parties in the matter for which the documents are required.

On the other hand a Notary Public is a qualified lawyer who holds an internationally recognised public office and their specialism lies in the preparation, authentication and certification of documents for use anywhere in the world and is appointed by the Archbishop of Canterbury following a stringent application process involving an intense 2 year training course, which can only be taken by those already holding sufficient qualifications in a variety of legal practise areas.

The primary duties of a Notary Public are to verify the identity of an individual to whom the documents relate, to ensure the individual has read and understood any documents they are signing and that the individual has an understanding of the transaction to which the documents are facilitating.

The reason a Notary Public is trusted to facilitate transactions anywhere in the world is because, while a solicitors primary duty is to his/her client, a Notary Public’s primary concern is to the transaction he/she is facilitating in another jurisdiction and the authenticity of the documents involved.

A Notary public is often required when dealing with assets outside of England, such as selling shares that are administered by an overseas company or perhaps closing an offshore bank account or perhaps an overseas property transaction.

While it may be a bit of a pain to visit a Notary Public to get documents authenticated, it eliminates the need for the individual to travel abroad to deal with their affairs.

So the long and short of it is……….if you need some documents authenticated where the transaction and the assets are all here in England or Wales then a solicitor empowered to Commission Oaths will be fine, but if any part of the transaction involves an overseas element then you should probably be using a Notary Public.