Living in Bermuda, one might assume that we are all immune to tax changes happening overseas.

However, recently proposed amendments to legislation across the pond could well impact many people in Bermuda, both Bermudians and expats alike.

The United Kingdom (UK) Government has recently published this year's Finance Bill, which alters the definition of residence and updates the taxation system in the UK. This means that the landscape of offshore/onshore tax planning has shifted.

As of April 6, amendments will (a) affect whether or not a person is to be treated as a UK resident for tax purposes, (b) impact which of their assets are taxable and (c) generally alter how a UK-connected person may arrange his financial affairs in the future to make the most of his earnings and assets.

Currently, any individual who is present in the UK for 183 days or more in a given tax year (or for an average of 90 days over any four-year period) will be treated as a UK resident.

In the past, if you travelled into the UK on Friday afternoon and left on Monday morning, you could exclude Friday and Monday from your calculation of days in the UK. However, after April 6, in determining if an individual is resident in the UK, days of departure and arrival (but not arriving in the UK for the purpose of taking a connecting flight) will now count for the purposes of determining UK residency status.

According to the new rules, individuals could become UK-resident after staying only 45 nights in the UK in any given year.

This could have a large impact on people's travel plans, especially individuals who often travel to the UK for business.

The knock-on effect of this change is that more people will now be treated as UK-resident for tax purposes, some of whom may not even realise until it is too late, so take note!

At the moment, people who are considered to be UK-resident but not UK-domiciled are able to use the remittance basis of taxation, where income and gains from sources outside the UK are only taxed when brought into the UK. Conversely, after April 6, in order to still be able to use the remittance basis each taxable person ¿ this includes children ¿ will have to pay an annual fee of £30,000 (approximately $60,000).

If they do not opt to pay this fee their income and gains from assets and property anywhere in the world will be subject to UK tax.

In some cases, this may mean that an individual is subject to tax at 40 percent on his worldwide income.

The news from the UK is not all bad as the rate of capital gains tax for individuals has been reduced from 40 percent to a fixed rate of 18 percent.

The capital gains tax down side is that taper and indexation relief will no longer be available when assets are sold.

Offshore trusts with UK-resident settlors or beneficiaries have historically avoided UK tax but from April 6, UK-resident settlors and beneficiaries may also be taxed on the income and capital gains arising from offshore trusts to which they are connected. Those trusts that own shares in companies that are registered in the UK or are holding UK real estate are specifically targeted by the new legislation.

Understandably, the Finance Bill could have a significant impact on people who previously were not considered to be UK-resident. But while the UK Government continues its bid to reduce the viability of offshore trusts and globe-trotting lifestyles, as always, tax professionals are evolving tax mitigation methods.

In the vast majority of cases, exposure to UK tax can be minimised by careful tax planning ahead of April 6.

If you are concerned that the UK residency and tax changes may affect you, do not delay ¿ take action today!

Anna Knapman-Scott and Annika Jones are attorneys in the Trusts Practice Group of Appleby. A copy of this column can be found on the Appleby website at www.applebyglobal.com This column should not be used as a substitute for professional legal advice. Before proceeding with any matters described herein, persons are advised to consult with a lawyer.