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Enterprise Investment Schemes aren’t just for full-time UK residents. With a few restrictions, even non-UK domiciled (“non-doms”) individuals can benefit.
The rules surrounding non-domicile status are complicated. HMRC defines your domiciled country as:
Your domicile’s usually the country your father considered his permanent home when you were born. It may have changed if you moved abroad and you do not intend to return.
The implications for paying tax also take into account:
- How much you earn
- Whether you work in the UK or abroad
- If you’re seconded to the UK
- How much tax you’ve already paid in your official domiciled country.
EIS can offer a way to reduce your tax burden.
How Does It Work?
In order to use an EIS scheme to claim tax relief, you need to have a UK income tax liability to claim against. The usual EIS/SEIS rules apply.
If you sell your shares, and make a profit, you’ll be liable for UK Capital gains tax, but a tax advisor will be able to explain your options for moving the original funds offshore again.
There are also some additional rules to do with your relationship with the company. For example, you can’t receive any “related benefit”. So you (and your family) can’t accept anything beyond a normal salary (so no property, goods or services for example).
The first thing to do is to check that you qualify for EIS non-domicile relief. It might be different if you come to study in the UK for example. You can get plenty of information from the HMRC non-dom page, or you may prefer to get professional advice from a tax advisor.
If you think this applies to you and would like more information, check out our more technical article on EIS for non-doms. We’ve included a couple of handy examples so you can get a feel for how it works.
When you come to complete the paperwork, you'll need to fill in what's called a "compliance statement" (EIS1) and send it to HMRC.
And if you feel you would benefit from some advice from a EIS and SEIS professional, please get in touch and we can arrange a free, no-obligation meeting with you at your office.