This years Budget saw the Government announce that it would consult on whether entitlement to the UK Personal Allowance should be restricted for non-residents and how this might be achieved.

At present many non-residents are perfectly entitled to claim the full UK personal allowance. The non-discrimination article in most double tax treaties extends the entitlement to UK personal allowances to nationals of treaty countries who are also resident here. UK nationals are entitled to claim the personal allowance wherever in the world they are resident.

The consultation proposes that, going forward, UK personal allowances will only available to UK residents and non-residents who receive most of their income from the UK. This proposal will be particularly relevant to non-residents who have UK rental income and those working to the UK for a short period of time.

The consultation closes on 9 October 2014 and I would keep an eagle eye on the Chancellors Autumn Statement on 3rd December for the next development in this area.