UK Rules for Dual Contracts of Non-doms

March 21st 2015
New rules have now been set out regarding how the UK treats resident non-domiciles who receive earnings from overseas employers under dual contracts.

Income from these contracts will be taxed as UK income unless this has been taxed abroad at 33.75 per cent or more.  This does not apply if the non-dom has to be employed in both territories in order to fulfil the contract or to overseas income that falls within the three year period for Overseas Workday Relief.

These rules will apply as long as all the following conditions are satisfied;

- The taxpayer is employed in both the UK and overseas
- The UK and overseas employer are associated 
- The UK and overseas employment is related
- The overseas rate of tax on the overseas income is less than 65% of the UK’s additional rate (which is currently 45%)

If all of the above conditions are satisfied then the overseas income will be subject to tax in the UK.