George Osborne has just announced in his Summer Budget that non-doms will now have to pay inheritance tax on residential property held offshore.

Osborne stated in regard to the Non-Domicile tax status that, although a long standing feature of the UK tax system which played an important role, there was an unfairness in the non-dom regime that he was putting a stop to today.

“Simply abolishing it altogether, would, as Ed Balls correctly noted, probably cost the country money,” Osborne noted, however adding that it was not fair that people who were born in the UK to parents who were domiciled here, could later in life claim to be non-doms and live here.

“It is not fair that non-doms with residential property here in the UK can put it in an offshore company and avoid inheritance tax.

“From now on they will pay the same tax as everyone else.

“Anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains,” Osborn stated today.

“We will consult to get the detail right.

“All these non-dom measures will come into effect in April 2017, and they will raise £1.5bn in extra tax for the Exchequer of this Parliament.”

Dr Anthony Lee, Senior Director at BNP Paribas Real, commented: “This move could act to further enhance demand for prime UK residential property as non-domiciled owners seek to take advantage of UK inheritance tax relief, and therefore sell property held abroad and 'repatriate' their assets to the UK.”