We have all heard of bad news being buried behind a “feel good” news headline.

It seems HMRC is making the most of things during the holiday period and has recently made an announcement affecting many non domiciled UK taxpayers owning UK based assets secured by offshore funding.

On 4 August HMRC announced that it has withdrawn its ‘concessionary’ treatment for loans on commercial terms taken out by remittance basis taxpayers and secured and serviced using foreign income or gains.  It said that the change was being made because it is seeing “large numbers of arrangements” which are “not considered to be commercial and not within the intended scope of the concession”.

From 4 August, if a loan is secured using overseas income or gains and is serviced or repaid from foreign income or gains the repayments of capital and interest will, as before constitute remittances. Additionally, from that date the actual amount of any loan that is remitted to the UK will also be treated as a remittance to the extent that it is secured on different foreign income or gains.  This will potentially give rise to a double charge in respect of the amount of the loan used in the UK if the loan is serviced from different foreign income or gains to that used as collateral.

If the taxpayer has relied on the previous concession and has not declared the remittances he will not be assessed to tax in respect of the remittances, provided the taxpayer gives give a written undertaking either that the foreign security has been or will be replaced by non-foreign security before 5 April 2016 or that the loan or the part that was remitted to the UK will be repaid before 5 April 2016. The undertaking must be given by 31 December 2015.