Prior to 6 April 2008, the UK was generally regarded as a good place for foreign domiciled individuals to develop and grow their businesses. The changes introduced by the Chancellor of the Exchequer in the 2008 budget threaten to undermine the UK (and London in particular) as a place where business gets done, money gets made and jobs are created.

There are a number of areas that should cause concern for non-domiciled individuals - and against which good tax planning advice can be helpful.

1. New tax legislation

Legislation will be introduced in Finance Bill 2008 to ensure that adult non-domiciled, or not ordinarily resident, individuals who have been in the UK more than seven of the past ten tax years, will continue to be able to access the remittance basis of taxation on payment of an annual charge of £30,000 charged on the foreign income and gains they leave outside the UK, unless their unremitted foreign income and gains are less than £2,000.

The charge will apply only to adults so that individuals under the age of 18 will not have to pay the £30,000 charge until the year they turn 18.

2. Period of Residence in the UK

The UK's position on residence initially is very clear. A person is not resident in the UK if during the tax year in question the individual spends (in total) less than 183 days in the United Kingdom.

However, this is not as clear cut as it may seem because the 183 day rule is as a result of a mix of statute and case law, and may be set aside

In the past, days of arrival and departure were ignored for the purposes of this calculation. The government had proposed to include days of arrival and departure. However following representations from advisors, this was relaxed a little. Now only days on which you were in the UK at midnight are counted as being days spent in the UK, which effectively means your date of arrival is included but your date of departure is not included.

If you are merely in transit in the UK, then even if this crosses the midnight 'counting point' that day is not included in determining whether you have reached the 183 days or not. However you must not use the transit (which could include travel from an airport to a sea port, or travel between two airports, for example) as an opportunity to conduct business meetings. This may create some grey areas over the use of, say, videoconferencing using portable electronic devices which may end up being tested in court before being clarified.