Collateral Debt

With effect from 4 August 2014, HMRC changed, without notice, their stated position with respect to the treatment of commercial loans secured by foreign income or gains. From this point on, money brought to or used in the UK under a loan facility secured by foreign income or gains is to be treated as a taxable remittance in addition to any service payments. Prior to this, HMRC guidance was that only repayments or payments to service the loan could be treated as taxableremittances if made out of foreign income / or gains. HMRC contend that the change to the guidance is not retroactive as resident non-doms who relied upon it have until April 2016 effectively to unwind their present arrangements and, if necessary enter into new arrangements. Representatives of various professional bodies met with HMRC/HMT officials on 11...