Cryptoasset Reporting Framework
The government is launching a consultation to seek views on how best to implement the Cryptoasset Reporting Framework (CARF) and Amendments to the Common Reporting Standard.
The CARF is an automatic exchange of information international framework designed to tackle tax avoidance and evasion using cryptoassets. This measure will be effective from 1st January 2026, with information exchanges taking place from 2027.
This measure targets UK individuals disposing of cryptoassets, who, according to HMRC, are currently failing to declare their gains.
This measure is expected to raise £205m in additional taxes by April 2029. If this affects you, please contact us as soon as possible.
Changes to the taxation of non-UK domiciled individuals
From 6 April 2025, the current rules for non-UK domiciled individuals will end. The concept of domicile as a relevant connecting factor in the tax system will be replaced by a system based on tax residence.
- The new regime for personal foreign income and gains (FIG) will be available to individuals for the first 4 years of UK tax residence after a period of 10 years of non-UK tax residence;
- Eligible individuals will not pay tax on FIG and non-resident trust distributions arising in the first 4 years, where a claim is made, and will be able to remit these funds to the UK free from any additional charges;
- If an individual chooses to be taxed under the new 4-year FIG regime, they will lose entitlement to a personal allowance and the Capital Gains Tax annual exempt amount; and
- Where an individual has been tax resident in the UK for more than 4 years, they will pay UK tax on all worldwide income and gains as they arise.
The reforms include transitional arrangements for existing non-domiciled individuals, including
- Rebasing of capital assets to their 2019 value;
- A 50% exemption rate for taxation of foreign income for the first year of the regime; and
- A 2-year Temporary Repatriation Facility to bring existing offshore income and gains into the UK at a 12% tax rate.
This facility is expected to bring in an additional £15 billion of FIG onshore to the UK and raise over £1 billion in additional tax receipts.
In total, the reforms to the domicile regime are expected to raise £3.7 billion.
Eligible employees will also be able to claim Overseas Workday Relief in their first 3 years of tax residence for income from employment duties carried out overseas.
Subject to consultation, Inheritance Tax will also move to a residence-based system from 6 April 2025.
Extensions to Agricultural Property Relief (APR)
As part of an earlier consultation into the taxation of environmental land management, concerns had been raised that the current scope of APR was one potential barrier to some agricultural landowners and farmers making long-term land use change from agricultural to environmental use.
- It has been announced the APR will be extended to land managed under an environmental agreement with, or on behalf of, the UK government, Devolved Administrations, public bodies, local authorities, or approved responsible bodies; and
- This extended relief will be available for lifetime transfers and transfers at death on or after 6 April 2025.
The Rock Review of Tenant Farming in England recommended that 100% APR relief should be restricted where there were tenancies of 8 or more years. Further to additional consultation, it has been decided not to restrict APR for tenancies of 8 or more years. This is welcome news as concerns were raised it would reduce the amount of land available for tenant farmers as landowners would either take the land in hand themselves or enter into contract or share farming arrangements.
