WEALTHY foreigners living in Britain face further tax penalties following the Treasury’s closure of a loophole for offshore trusts.

In a government consultation document published last week, it emerged that non-domiciled UK residents with a strong link to a foreign country, who are known as “non-doms”, will be taxed on assets held in offshore trusts - even if they pay an annual levy of £30,000. It had been thought by accountants that this would exempt them from further tax.

It has also emerged that the new rules will affect all non-domiciled residents, even if they have been here for less than seven years. Previously it was believed the measures would affect only longer-term residents.

Peter Harrup, a tax partner at PKF, a firm of accountants, said: “There are measures in the draft legislation which will affect all non-domiciled individuals regardless of whether they have been here 60 years or 60 seconds.”

The Treasury announced tougher measures against non-doms following criticism that they were not paying any tax on their overseas assets.

The situation had made Britain a haven for wealthy foreigners such as the Chelsea FC owner Roman Abramovich and steel tycoon Lakshmi Mittal, but the loophole also benefits many professionals and smaller investors from around the world.

Under the new rules, which will take effect from April 6, non-doms who have been resident in Britain for more than seven out of the past ten tax years can pay £30,000 a year or start to pay tax on all overseas earnings in the same way that a domiciled British resident would.

It was initially thought that offshore trusts would be exempt and that they would be able to sell assets free of capital gains tax, even if those assets were situated in the UK.

However, the newly released consultation paper indicates that any gains made from offshore trusts will be taxable immediately, whether or not the assets sold are in Britain or overseas.

Although all these proposals were included in an earlier “consultation” document, it appears that most of them are not up for discussion and are likely to become law in April.

Harrup said: “It is particularly frustrating that these measures have only just come to light now in the draft legislation, having been left out of the consultation document published in December.

“Cynics might claim that its earlier omission was deliberate in an attempt to restrict the time non-domiciled individuals have to act.”

Harrup expects a rush of activity before the April deadline as non-doms try to take advantage of the current rules while they still can.

The consultation paper also highlights an important change for regular visitors to Britain who are anxious to avoid becoming resident here for tax purposes.

The existing rules allow people to spend 90 days in the UK without being taxed as a resident. This will be amended so that arrival and departure days will count as days spent in the country for the first time.

That means a four-day visit will now count as four days’ presence in Britain, where previously it would only have counted as two days.