HMRC has published a consultation proposing significant changes to the reporting obligations for close companies. If implemented, the new rules would require companies to report a much wider range of transactions with their participators, reflecting HMRC’s continued focus on improving tax transparency and reducing non-compliance.

The consultation, published on 19 March 2026, forms part of HMRC’s wider efforts to tackle the small business corporation tax gap, which it believes has been driven in part by the blurring of company and personal finances. Under the current regime, reporting is largely limited to situations where a section 455 tax charge arises on loans to participators. HMRC considers this approach too narrow, as it provides little visibility over many other transactions between close companies and their owners.

Under the proposals, close companies would be required to report a broader range of transactions, including loans, cash payments, dividends, asset transfers, loan repayments and loan write-offs. For each transaction, companies would be expected to provide information such as the identity of the participator, the value of the transaction and the date it took place. Although HMRC’s preferred approach is annual reporting alongside the corporation tax return, more frequent reporting has not been ruled out.

While the proposals are primarily aimed at owner-managed businesses, their impact could extend much further. Many privately owned groups and private equity-backed businesses also fall within the definition of a close company and could face a significant increase in compliance obligations. In particular, reporting requirements for intra-group transactions may create additional administrative burdens and could overlap with other reporting regimes, including the International Controlled Transactions Schedule.

The consultation also leaves a number of important questions unanswered, including how the new rules will apply to group structures, partnership-owned businesses and existing exemptions within the loans to participators regime. Businesses that may be affected should monitor developments closely, as the final rules could represent a substantial change to the reporting framework for close companies.

Recent geopolitical events, including ongoing conflict in the Middle East, have brought renewed attention to the “exceptional circumstances” provisions within the UK Statutory Residence Test (SRT).

This is particularly relevant for globally mobile individuals who are seeking to remain non-UK tax resident but have spent more time in the UK than planned due to events outside their control.

Under the SRT, individuals may be able to disregard up to 60 UK days where their presence in the UK is caused by exceptional circumstances beyond their control. However, this only applies to certain parts of the SRT and is not a general exemption. The individual must also intend to leave the UK as soon as the circumstances allow.

HMRC guidance suggests that exceptional circumstances may include natural disasters, civil unrest, war, or sudden serious or life-threatening illness or injury. Foreign, Commonwealth and Development Office (FCDO) travel advice may also be relevant, although HMRC has made clear that it will not be the deciding factor on its own.

In April 2026, the Society of Trust and Estate Practitioners (STEP) asked HMRC for further clarification on how the rules should apply where travel to a particular region becomes unsafe. STEP specifically asked about the difference between FCDO advice against “all travel” and “all but essential travel”, and whether individuals affected by conflict could disregard UK days where they remained in the UK rather than returning overseas.

HMRC’s response was cautious. It confirmed that no blanket assurance can be given and that each case will depend on the individual’s facts and circumstances. FCDO advice may be considered, but it will not automatically determine whether exceptional circumstances apply.

The position therefore remains highly fact specific. Recent case law also shows that HMRC is likely to interpret the exemption narrowly. Affected individuals should not assume that UK days will be disregarded without taking specific professional advice.

As a practical point, globally mobile individuals should maintain a buffer of UK days rather than spending up to the maximum allowed under the SRT. This helps reduce the risk of becoming UK tax resident where unexpected events arise but do not ultimately qualify as exceptional circumstances.

When an estate includes overseas assets, executors can face inheritance or estate tax charges in more than one country. Many assume relief is only available where the UK has a double tax treaty, but the UK’s inheritance tax (IHT) treaty network is surprisingly limited.

Overseas property, bank accounts or investments can create a risk of the same asset being taxed twice. While this can complicate estate administration, double taxation is not always unavoidable.

The UK has IHT treaties with only six countries: South Africa, the USA, the Netherlands, the Republic of Ireland, Sweden and Switzerland plus a small number of older estate duty treaties (France, Italy, India and Pakistan). As a result, treaty relief is often unavailable.

In many cases, unilateral relief may provide the answer. This relief can reduce UK IHT where foreign tax has been paid on the same overseas asset. However, eligibility depends on factors such as the nature of the foreign tax, the asset involved, and where the asset is treated as situated under UK law. Any credit is generally capped at the amount of UK tax attributable to that asset.

A common mistake is to assume that paying foreign tax automatically entitles the estate to UK relief. Executors must carefully consider how the asset is characterised and whether the foreign tax qualifies for credit.

For estates with an international element, early specialist advice is essential. Key questions include:

• Is there an applicable IHT treaty?
• If not, can unilateral relief apply?
• How is the asset classified and where is it situated for UK tax purposes?

Click HERE to read the article.

U.S. immigration status and U.S. tax residency are often assumed to be the same, however they operate under separate rules. An individual may not be considered a U.S. resident for immigration purposes but could still be treated as a U.S. tax resident.

The United States applies a worldwide taxation system, meaning individuals classified as “U.S. persons” for tax purposes may be subject to U.S. tax on their global income, regardless of where the income arises. This can include overseas employment income, foreign rental income, dividends from non-U.S. companies, and capital gains realised outside the United States.

Tests for U.S. Tax Residency

U.S. tax residency is generally determined under one of the following tests:

• Citizenship – U.S. citizens are taxed on worldwide income regardless of where they live.
• Green Card Test – Individuals who hold lawful permanent resident status are typically treated as U.S. tax residents.
• Substantial Presence Test – Tax residency may arise where an individual spends sufficient days in the U.S. over a rolling three-year period.

Exceptions and Timing Considerations

Certain visa holders, including individuals temporarily present under F-1, M-1, Q, or J-1 visas, may be able to exclude days from the substantial presence calculation for a limited period. Medical circumstances may also affect how days of presence are counted.

The timing of entry into the U.S. can impact whether worldwide income or gains fall within scope of U.S. taxation in a particular year.

Practical Takeaway

Immigration status does not automatically determine U.S. tax residency. Individuals with U.S. connections should consider the residency tests and timing implications carefully to avoid unexpected tax exposure and ensure compliance with reporting obligations.

Non-U.S. individuals who invest in, work in, or transfer assets into or out of the United States face a complex tax landscape. The U.S. tax system distinguishes sharply between U.S. persons and non-resident aliens (NRAs), and understanding these distinctions is essential for effective planning. As the source document notes, “Persons who are neither U.S. citizens nor U.S. residents are subject to U.S. taxes” only in specific circumstances.

Income Tax Exposure

NRAs are taxed only on certain categories of U.S.-source income:

• Fixed or determinable annual or periodical income,such as dividends from U.S. corporations, passive rents, royalties, and some service payments. These are generally taxed at a flat 30% rate.
• Effectively connected income (ECI)from a U.S. trade or business, including wages for services performed in the U.S. and income from actively managed rental properties. ECI is taxed at graduated rates like U.S. taxpayers.

Special rules apply to real estate. Under FIRPTA, gains from the sale of U.S. real property interests are treated as ECI, and buyers must withhold 15% of the purchase price.

Estate Tax Exposure

NRAs face U.S. estate tax only on U.S.-situs assets, and the exemption is dramatically lower than for U.S. citizens just $60,000. The article explains that U.S.-situs property includes real estate, tangible personal property located in the U.S., shares of U.S. corporations, and certain debt obligations. Bank deposits with U.S. banks, however, are excluded.

Estate tax treaties with countries such as France, Germany, the U.K., and Japan may provide relief, including increased exemptions or marital deductions.

Gift Tax Rules

NRAs are subject to U.S. gift tax only on gifts of U.S.-situs real estate and tangible personal property located in the U.S. Gifts of intangible property such as shares of U.S. corporations are not subject to gift tax. However, gifts of cash made within the United States may be taxable, so cross-border planning is essential.

U.S. recipients of gifts from foreign individuals must report gifts exceeding $100,000 on Form 3520. As the document notes, “the penalty for failure to report the gifts is severe,” potentially reaching 25% of the gift’s value.

Generation-Skipping Transfer Tax

GST tax applies to NRAs only when the transfer is already subject to U.S. estate or gift tax meaning it applies only to U.S.-situs property.

The Role of Treaties

Tax treaties can significantly alter outcomes by reducing withholding rates, redefining situs rules, or increasing estate tax exemptions. However, the U.S. does not enter treaties that exempt U.S. citizens from worldwide taxation.

Conclusion

For non-U.S. individuals, U.S. tax exposure depends heavily on the type and location of assets, the nature of income, and the presence of applicable treaties. Because the rules differ sharply from those applied to U.S. citizens and residents, proactive planning is essential to avoid unexpected tax liabilities and reporting penalties.

On 26 March 2026, the IRS released its latest Tax Time Guide (IR-2026-41), encouraging taxpayers who have not yet filed or paid their taxes to take early action. The guidance highlights practical steps individuals can take to reduce penalties and interest, avoid delays, and resolve outstanding tax issues more efficiently.

Key Guidance for Taxpayers

The IRS emphasises the importance of filing tax returns as soon as possible, even where full payment cannot be made. Filing promptly can reduce failure-to-file penalties and enables taxpayers to access payment arrangements.

Taxpayers are also reminded to ensure returns are accurate by reporting all income and correctly claiming deductions, including those on Schedule 1-A, supported by appropriate records.

Electronic filing is recommended as the fastest and most reliable method, helping to avoid delays associated with postal submissions and postmark timing issues. Where tax is owed, making partial payments can help limit the accrual of penalties and interest.

Payment Options and Compliance

For those unable to pay in full, the IRS highlights the availability of instalment agreements, which can be set up online. Taxpayers are also encouraged to respond promptly to any IRS notices, as delays may lead to additional penalties or prolonged resolution.

The IRS continues to promote the use of its online tools, including the Individual Online Account, “Where’s My Refund?”, Direct Pay, and the Document Upload Tool, to help taxpayers manage their obligations efficiently.

Practical Takeaways

Taxpayers should take early, proactive steps to manage their tax position. Filing on time, making payments where possible, and engaging promptly with IRS communications can significantly reduce penalties and improve resolution outcomes.

• The UK can be attractive for expatriates because it offers favourable treatment for foreign income, particularly under the former non-domicile regime and the newer Foreign Income & Gains (FIG) rules introduced in April 2025. For a limited period, expats may avoid UK tax on overseas income and gains (or indefinitely under older remittance rules if funds stay offshore, outside the UK). This creates flexibility to manage investments and cash flow efficiently.
• The Additional advantages include no general wealth tax, a broad network of double tax treaties, and opportunities to control when foreign income becomes taxable. These features make the UK rather appealing for internationally mobile individuals creating significant planning opportunities – especially for those with significant non-UK income or assets.
• However, these benefits are time limited and complex. UK income is always fully taxable, and after a few years (typically 4 years under the FIG regime or longer under older rules). Individuals may become subject to UK tax on their worldwide income. The rules necessitate prudent tracking of offshore funds and remittances, and mistakes can be financially burdensome. For long-term residents or those regularly bringing money into the UK, the advantages decrease, meaning the UK is not a true tax haven but rather a time limited and conditional tax advantage. Tailored tax and legal advice can help individuals understand and manage the complexities of moving to the UK.

Recent unrest across the Middle East has understandably caused concern among UK expatriates and internationally mobile individuals, particularly those residing in or considering relocation to centres such as Dubai. With travel disruptions, security issues, and geopolitical tensions dominating the headlines, it is natural to question whether to postpone or alter plans for stay or movement within the region. However, while the situation is indeed complex, rash decisions can lead to unforeseen UK tax liabilities. A measured and strategic approach is typically advisable over hasty action.

Expats based in the Middle East may naturally consider returning to the UK until stability is restored. Nevertheless, the UK’s statutory residence test requires careful assessment of the tax implications prior to such moves. The test’s day count thresholds are strict and can be inadvertently surpassed, particularly as the tax year approaches its end. Even short, unplanned absences could unintentionally re-establish UK residence, potentially subjecting individuals to UK taxation on worldwide income and gains.

The temporary non-residence rules further complicate matters. Individuals who have been non-UK resident for fewer than five tax years may find that certain gains realised during their time abroad are recognised for UK tax purposes upon their return. Consequently, timing is of the essence.

It is important to note that departing the Middle East does not necessarily require returning to the UK. Depending on individual circumstances, it may be feasible to relocate temporarily to another jurisdiction while maintaining control over UK day counts, thereby avoiding unintended tax liabilities.

Long-term expatriates contemplating their future may also consider the benefits of the UK’s foreign income and gains (FIG) regime. Those who have been non-UK resident for at least ten consecutive tax years may, upon returning to the UK, benefit from a regime exempting overseas income and gains from UK tax for up to four tax years. Additionally, opportunities for inheritance tax-efficient planning relating to non-UK assets may be available. A carefully structured return to the UK can be advantageous but requires meticulous planning.

Prospective movers to the region may now be reevaluating their plans amid current uncertainties. While understandable, it is important not to let short-term upheaval undermine long-term strategic objectives. The original motivations for relocating tax considerations, lifestyle, or business factors may remain valid.

This could be a favourable moment to reassess and explore alternative destinations that better align with personal, commercial, and tax goals. Comparing different jurisdictions’ tax regimes, lifestyle benefits, and stability can ensure that any move proceeds based on a sound strategy rather than reactive choices.

The consistent message for all individuals is to avoid impulsive decisions. Geopolitical developments can evolve swiftly, but tax residence rules and long-term financial arrangements tend to be more stable. Taking the time to review options thoroughly, model potential outcomes, and consult with qualified professionals is essential to making informed choices helping to differentiate a prudent adjustment from a costly mistake.

In uncertain times, calm and calculated planning remain the most effective means of safeguarding both personal security and long-term financial health.

Returning expats often face a property market and regulatory landscape that has changed significantly. Early planning particularly around tax, funding, and documentation can make the process far smoother.

Tax Residency and SDLT

Your tax residency on completion directly affects Stamp Duty Land Tax, including whether the 2% non resident surcharge applies. The Statutory Residence Test looks at your UK days, ties such as accommodation or work, and how long you have lived abroad. Those away for fewer than five years may also be caught by temporary non residence rules, triggering unexpected tax charges. Because timing can influence both SDLT and future capital gains exposure, early advice is essential.

Leasehold, Freehold and New Builds

Leasehold reform, service charge scrutiny, and new build protections mean buyers must understand their obligations. A detailed report on title is vital especially when purchasing remotely to clarify ground rents, service charges, and any upcoming major works or construction deadlines.

Practical Challenges When Abroad

Starting the process overseas is possible but can be slower. ID checks, documents requiring wet ink signatures, postage delays, and time zone gaps can all affect progress. Some digital tools help, but not all documents can be signed electronically, so additional time should be built in.

Estate Planning

A UK property purchase is a natural moment to review your will. Ensuring it is valid in England and Wales, and compatible with overseas assets and taxes, helps prevent complications later.

Why Early Tax Advice Helps

Engaging a tax adviser early allows you to structure the purchase efficiently, prepare the necessary documents, and navigate the UK system confidently even from overseas. With the right support, returning to the UK and buying a home can be seamless.