Non-domiciled people living in the UK face a crackdown by HM Revenue & Customs which has added extra questions to the coming year’s tax returns, The Times has learnt.

From April 6, non-domiciled residents filling in a self-assessment tax return will for the first time be asked to declare on what date they changed their domicile. They will also have to confirm if they have ever been domiciled in the UK as well as stating the date on which they came to live in the UK.

Angela Beech, tax partner at Blick Rothenberg, the accountancy firm, said: “Up until now nondomiciled people simply had to confirm that this was their status. Now it looks like the Revenue is getting ready to challenge them. It is a stealthy way of doing this. They are not changing legislation, but it seems likely that there will be more investigations into nondomiciled taxpayers.”

Those born abroad or who have changed their domicile can claim to be nondomiciled even if they have lived in the UK for years. They pay no income tax, capital gains tax or inheritance tax on any assets outside the UK, making it a favourite option for wealthy foreigners living in the UK. “The information about how long someone has been living in the UK is not something the Revenue would have at its fingertips, but it will now,” Mrs Beech said.

This will be particularly useful for HMRC when it comes to collecting inheritance tax, as residents are deemed domiciled for inheritance tax purposes once they have been living in the country for more than 15 years and 2 days. HMRC can then claim 40 per cent inheritance tax on their worldwide assets.

A spokeswoman for HMRC said: “The changes to the nonresidence pages of the self-assessment tax return are part of the process of modernising tax returns. The self-assessment return is often the first instance where a customer indicates that they have nondomicile status. The new questions will help determine whether HMRC requires any further information.”

HMRC has already tackled the problem of getting tax from the £180 billion stashed by UK investors in offshore bank accounts. It is to be given access to hundreds of thousands of investors’ records from this summer.

Who qualifies?

– Being resident in the UK is different to being domiciled here
– Those born outside the UK with no connection to the country or whose father was domiciled outside the UK when they were born can claim nondomicile status
– There is no limit to the length of time people can stay in the UK as nondomiciles, although to maintain their status there must be a future event such as the end of children’s education that will trigger their return to their country of domicile

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