Offshore

First HNW Client Takes Advantage Of Italian Non-Dom Regime

Tom Burroughes, Group Editor, London, 4 August 2017

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The UK may be tightening rules on its long-standing non-dom regime, but Italy looks to be grabbing some of the action with its own system.

An international law firm says it has acted for the first person to take advantage of Italy's newly-minted non-domiciled status regime, which ironically came into force while that of the UK has been squeezed. Withers said its client, who was not named, used to be a UK non-dom but decided to move to Italy.

"Our client has been non-tax resident in Italy for the past nine years and owns assets and investments around the world and has been the director of several non-Italian companies. He is a great illustration of how the Italian res non-dom scheme can be extremely attractive for internationally mobile individuals and we're delighted to have been able to secure the first approved non-dom application," Giulia Cipollini, head of Withers Italian tax team.

The Italian non-dom regime has been in effect since January 2017 and combines with several other Italian tax incentives, such as low inheritance and gift tax rates, and exemptions from capital gains tax on certain forms of property.

The development comes at a time when the UK, which has operated a non-dom system for more than 200 years, has in recent times tightened the rules, most recently ending the status of permanent nom-dom. Along with other changes, such as changes to tax treatment of foreign-owned property, has been seen as making the UK relatively less attractive than before for wealthy foreigners.

Under the Italian system, non-dom persons must also be tax residents and have been in Italy for more than 183 days each year. And finally, once confirmed as non-doms, they must pay €100,000 per year, and €25,000 for each family member. (To see an article about the system in more detail, click here.)

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