2005 Chancellor's Budget Residency Domicile Tax Avoidance.
Residency and Tax Avoidance A Capital Gains Tax loophole has been closed. The loophole allowed people leaving the UK on a temporary basis to exempt themselves from any capital gains that occurred whilst they were out of the country.
The new legislation will start to affect those people who leave the UK between 16 March 2005 and 5 April 2005. The law has been changed in these circumstances because prior to the legislation change, those people not resident and not ordinarily resident in the UK would not have to pay tax if they were away from the UK for more than 5 years. Now, those people that are temporarily away from the UK and those people resident in two countries at the same time cannot escape tax on gains whilst they were not in the UK.
A clampdown on trustees benefiting from the use of double taxation agreements has also been introduced. From 16 March 2005 no tax treaty of any country will be capable of overriding Capital Gains Tax law if at some point during the year of disposal the trustees were resident or ordinarily resident in the UK.