Stephen Parnham
Stephen has over 30 years experience helping individuals, owner managed businesses and trustees improve their tax positions. As well as advising his own clients, he provides professional technical support to firms of Chartered Accountants and Solicitors from Hampshire in the south to the West Midlands and Shropshire in the north.
He brings clarity and direction to complex tax issues. He is a Chartered Tax Adviser ( CTA ), a Trust and Estate Practitioner ( TEP ) and a member of the Association of Taxation Technicians ( ATT ). He is a member of the Society of Expert Witnesses and regularly contributes to the professional press.
Practice Area
Panel
- Contributing Author
5 Contributions by Stephen Parnham
![Legacy UK tax planning for resident non-domiciliaries: remittance basis, excluded property trusts, deemed domicile, home ownership and offshore structures (to 5 April 2025) [Archived]](images/default-source/pa-pool/9.tmb-small.jpg)
PRACTICE NOTES
Legacy UK tax planning for resident non-domiciliaries: remittance basis, excluded property trusts, deemed domicile, home ownership and offshore structures (to 5 April 2025) [Archived]
STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime
The Finance Act 2025 (FA 2025), which gained Royal Assent on 20 March 2025, enacts the removal of the remittance basis of taxation and brings in a residence-based system commencing on 6 April 2025. FA 2025 also replaces domicile with residence as the key factor in establishing liability to inheritance tax. Additional measures further revise the rules for excluded property status, abolish the protected settlements status of offshore trusts, and amend overseas workday relief. For further detail and context, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26.
ARCHIVED: This Practice Note is archived and not maintained. It summarises the inheritance tax (IHT), income tax and capital gains tax (CGT) regimes applying to UK-resident non-domiciliaries, and highlights the fundamental planning opportunities available to them. Such planning generally relates to the overseas assets and income of non-domiciliaries. To make use of the favourable rules, it should be confirmed at the outset that the individual is genuinely non-UK domiciled. The Henkes v HMRC case suggests...
Private Client
PRACTICE NOTES
Shadow directors and offshore companies: UK benefits in kind taxation under ITEPA 2003, covering accommodation, loans and residual benefits; Deverell and R v Allen; territorial scope and FA 2025 changes
STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime
Finance Act 2025 (FA 2025), which obtained Royal Assent on 20 March 2025, enacts measures scrapping the remittance basis and introducing a residence-based system, effective from 6 April 2025. FA 2025 also substitutes domicile as the principal criterion for determining exposure to inheritance tax. Additional reforms cover revisions to the rules for excluded property status, the removal of protected settlements status for offshore trusts, and adjustments to overseas workday relief. For details on these updates, refer to: Practice Notes: The abolition of the remittance basis of taxation from 2025–26, A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. This Practice Note examines shadow directors of offshore companies and the degree to which such individuals might incur benefit in kind charges under the benefits code in the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). Note that the notion of a shadow director is not the same as a de facto director. The latter is a person who holds themselves out as acting as a director, even though not actually in practice acting or...
Private Client
PRACTICE NOTES
UK inheritance tax: historic family home schemes, countermeasures and case law (GWR/GROB, POAT, Ingram, Eversden, reversionary leases, home loan/double trust) and DOTAS
Introduction
The principal legislation in the Inheritance Tax Act 1984 (IHTA 1984) and the earlier capital transfer tax system left a gap. Nothing stopped a person aiming to limit inheritance tax (IHT) on death from making a lifetime transfer (hoping to live at least seven years thereafter) yet keeping the use or enjoyment of what was given. As a result, under those rules, someone could, in effect, divest their home for IHT purposes while still living in it. Section 102 and Schedule 20 to the Finance Act 1986 (FA 1986) introduced the gift with reservation of benefit (GWR or GROB) rules to shut this loophole. When the GROB rules bite, the gifted asset (or, in some circumstances, a replacement) is generally treated as remaining within the donor’s estate for IHT while the donor continues to benefit. The rules can apply where, among other conditions, a person makes a gift of property on or after 18 March 1986 which is not then enjoyed to their entire, or virtually entire, exclusion. A GROB can be avoided if the donor pays a full market rent, in appropriate cases and on that basis, thereby satisfying the requirement for their entire exclusion from enjoyment of it...
Private Client
PRACTICE NOTES
UK pre-owned asset tax (POAT): anti-avoidance income tax charge—scope, exemptions, interaction with gifts with reservation, IHT election and planning for land, chattels and intangible property
The pre-owned asset tax (POAT) is an inheritance tax (IHT) counter-avoidance provision, brought in by Schedule 15 to the Finance Act 2004 (FA 2004), and was intended to penalise users of IHT avoidance arrangements, though its reach goes wider than such planning in practice.
POAT operates as a standalone yearly income tax charge on particular individuals, termed ‘chargeable persons’, specifically in respect of advantages they obtain as a former owner of property, or of assets traced from that property.
The advantage may, for example, consist of occupying land, using or holding chattels, or having the ability to draw income or capital from a settlor-interested trust that contains intangible property.
The statutory wording can be somewhat unclear at points. Nonetheless, as FA 2004, Sch 15 is designed to defeat structures under which a taxpayer enjoys assets that no longer form part of their estate for IHT, any doubtful points ought to be interpreted with that objective in view and context.
Background
Before 17 March 1986, a person could make a gift that was effective for IHT even where the donor continued to enjoy some benefit in the asset given. This defect within the Inheritance Tax Act 1984 (IHTA 1984) was remedied...
Private Client
PRACTICE NOTES
UK temporary non-residence: anti-avoidance for income tax, CGT and remittances (post-2013); treaty tie-breakers; close company distributions; foreign pensions; planning; 2025 remittance basis abolition and TRF
Temporary non-residence—statutory anti-avoidance rule
The statutory test for non-residence contains a general anti-avoidance provision intended to remove tax advantages that could otherwise be secured if an individual is non-UK resident only for a short spell. This rule is set out in paragraphs 109–144 of Schedule 45 to the Finance Act 2013 (FA 2013).
As the statutory test applies separately to each tax year, it is feasible for someone to be non-UK resident for one, or a small number, of tax years even though they are UK resident both beforehand and afterwards.
The rule aims to stop individuals engineering a brief period of non-UK residence and, in that window, realising sizeable income or gains that would not be taxed in the UK because of their residence status. It therefore targets sources where the emigrating individual can control the timing of receipts, and income and gains that have in effect been built up prior to departure from the UK.
Such UK tax avoidance is countered by bringing the income and gains into charge in the tax year in which the person returns to the UK. The definition of temporary non-residence is framed in terms...
Private Client
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