01 February 2009 Issue 2 Jacob Rigg

Wealth Management Planning: The UK Tax Principles and The Taxation of Foreign Domiciliaries (7th Edition)

Reviews of 'Wealth Management Planning: The UK Tax Principles' by Malcolm Finney and 'The Taxation of Foreign Domiciliaries 2008-09' by James Kessler QC.

HM Government’s recent changes to the rules on residence and domicile places the present UK taxation treatment of non-UK domiciled, UK resident individuals in sharp focus. Such individuals may fall into one of several categories, including employees on secondment to a business in the UK; entrepreneurs attracted to run their businesses in the UK as a major financial centre; spouses of UK residents; and the internationally wealthy. Whether they are in the UK for a finite period, or for some as yet undefined period, or planning to come to the UK in the future, the proper planning of their exposure to UK tax is an important consideration.

Fortunately two excellent books have recently been released to cover the new ground. Malcolm Finney’s Wealth Management Planning: The UK Tax Principles and James Kessler’s The Taxation of Foreign Domiciliaries (7th Edition) have both been released recently and are very timely. Both written by renowned, long-standing experts, they provide sufficient detail to give the deepest technical thinker useful help, but are accessible to a non-practitioner like myself.

These indispensable works contain detailed, but accessible, discussion of each head of tax and area of tax-planning relevant to non-UK domiciled individuals. The basics – what constitutes domicile and residence for the purposes of the current UK tax legislation, and the meaning of the remittance basis of taxation – are reviewed in a thorough series of chapters. There are planning techniques and explanations for every aspect of a non-domiciliary’s life in the UK, be it temporary (requiring consideration of UK earnings, and the arrival and departure rules) or longer-term (requiring planning for the family home, and IHT mitigation). Finney’s work considers it slightly differently, from an overall wealth management perspective, which is useful and accessible.

The tax-efficient funding of a non-UK domiciled individual’s lifestyle is the touchstone of planning for such clients. The tax treatment and implications of the creation and use of offshore trusts, funds, policies and other investments are explained in detail. There are also detailed chapters on each aspect of the rules on transfers of assets abroad, with explanatory examples.

The Taxation of Foreign Domiciliaries has excellent chapters on the meaning of remittance; something on which STEP engaged HMRC and HM Treasury at an early stage in the debates over the Finance Bill 2008. It also has a useful warning over trustee residence. As a lecturer in EU politics and law, I found the chapter on EU defences against sections 13 and 86 (as was) particularly interesting, though many practitioners may not find it of direct use in their daily work. When will someone challenge these sections in the Courts?

Wealth Management Planning: The UK Tax Principles gives an clear and strategic viewpoint. Although it is an equally weighty tome, the book is set out very clearly and is easy to read. It contains very useful sections on the rules for, and the uses of, offshore and onshore bonds.

The thorough coverage of each aspect of non-domiciliary taxation, and the practical approach taken in each book, with comprehensive explanations and clearly-explained worked examples, makes either book an exceptionally useful tool for practitioners in an area increasingly under the taxation microscope. I would recommend both.

Title: Wealth Management Planning: The UK Tax Principles

Author: Malcolm James Finney

ISBN: 978 0470 72424 8

Price: GBP60

Publisher: Wiley


Title: Taxation of Foreign Domiciliaries 2008-09

Author: James Kessler QC

ISBN: 978 1 901614 36 7

Price: GBP175

Publisher: Key Haven