The International Tax Round Autumn 2025

Editor’s message

With the sunshine promptly retreating under a blanket of grey and the transition to autumn closing in, I can’t help but reflect on an unusually tranquil summer. Still in the disorienting throes of losing my mum in April, and navigating the complexities that come with grief, I noticed myself finding affinity and comfort in simplicity.

Over summer, revisiting hobbies offered me a helpful dose of purpose, mixed with the lightness needed when things feel heavier than usual. I found myself racking up the amount of hours on a padel court that may have suggested I was pursuing a career switch. In truth, this increasingly popular sport presented the perfect pastime for a long summer in London.

And who can deny the glory of a London evening draped in sun? There is a unique charm to it, with the paradoxical mix of energy and calm tapered with long, light evenings full of seemingly endless opportunity, all met with a collective sense of gratitude.

It won’t be long until I’m back in Kenya, reuniting with family and spending much-needed time with my dad particularly. This visit will offer important time to feel grounded and connected as part of my healing journey. Autumn often signifies reset – in many ways, it feels like a new year. I look forward to what this season will bring, with a fresh wave of energy, opportunities and challenges.

At home and at work, there will be a shift in pace compared to the slower speed of summer. The Autumn Budget looms, with a date set for later than usual this year, giving extra time for speculation to mount over tax increases, amongst so much else.

Will we see bold moves such as a ‘Wealth Tax’ or even an ‘Exit Tax’? This type of musing has become an early-autumnal ritual, where we ponder how policy may shift and the associated implications for clients, businesses and advisers alike. The only thing we can be sure of is change. Whether it’s anticipated or not, staying prepared is half the battle – in tax and in life.

With those parting words of wisdom, I do hope this edition gives you some food for thought and useful insights into a space that never stays still for long.

Enjoy the read!

Contents

• Taxing private jets and business flights: A global momentum building.
• Non-resident? No Inheritance Tax (‘IHT’)? Think again.
• US reaches agreement on Pillar Two, exempting US companies from top up taxes.
• EU demands Spain end ‘discriminatory’ tax rules on non-residents.
• I will be wrong if an ‘Exit Tax’ or ‘Wealth Tax’ is introduced at the Autumn Budget.
• Mauritian trusts – Tax overview by Dale International Trust Company.

Taxing private jets and business flights: A global momentum building.

Taxing private jets and business flights: A global momentum building.

At the recent UN Financing for Development Summit in Seville (FFD4), held under the Seville Platform for Action, a coalition of eight nations, including France, Spain, Kenya, Barbados, Benin, Sierra Leone, Antigua and Barbuda, and Somali, formally committed to imposing levies on premium-class air travel and private jets to fund climate action and bolster sustainable development.

From an international tax perspective, this signals a broader shift: aviation taxation, particularly for high-emission, luxury segments is emerging as a viable tool for progressive, harmonised revenue-raising. The move indicates that governments are beginning to leverage environmental and equity considerations in tax policy and may gradually constrain global tax arbitrage in areas like cross-border travel benefits, tax deductions for corporate aircraft, and use-of-aircraft planning.

France has already debated higher levies on private jets and the EU is considering tighter alignment of aviation taxes with carbon objectives.

A growing policy push – the debate is no longer if but how such measure might be implemented and whether business should start factoring them into future cost and tax planning.

Non-resident? No Inheritance Tax (‘IHT’)? Think again

Like most tax, what is subject to tax is based on where you reside in the world, however most are unaware of the new rules regarding long term residency and how it affects your IHT position. From 6 April 2025, the concept of long-term residency was introduced for IHT. Long term residents are individuals that have been resident in the UK for 10 of the previous 20 tax years and are subject to UK IHT on their worldwide assets.

This means your assets remain chargeable, regardless of if you have been living it up in the sun in California or sequestered in a French nunnery! What this essentially means is that, if you retire abroad then your entire worldwide assets will still remain chargeable to UK IHT for up to 10 years after ceasing UK residence, depending on how long you were resident before departure, known as the ‘IHT tail’.

This represents one of the most far-reaching shifts in UK tax and creates significant exposure for internationally mobile clients leaving the UK. Estate and trust planning can no longer te tied to domicile status alone but must now factor in residence history and timing of departure.

US reaches agreement on Pillar Two, exempting US companies from top up taxes

The OECD’s Pillar Two aims to implement a global minimum corporation tax rate, ensuring that large multinational corporations pay their fair share of tax wherever they are. US Treasury Secretary Scott Bessent said on X a date ‘After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests.’

The agreement, according to the US treasury department means that US companies will be excluded from the Pillar Two top up taxes and in return the retaliatory taxes imposed by the US on non-US corporations, which were due to be introduced in President Trump’s ‘One Big Beautiful Bill’ will be removed.

The move means implementing a side-by-side system and recognising that US companies are already subject to domestic minimum tax rules – the agreement remains a political understanding – not yet binding law.

EU demands Spain end ‘discriminatory’ tax rules on non-residents

Spain currently applies tax on a notional rental income of up to 2% of cadastral value on homes owned by non-EU citizens, even if the property isn’t rented, while exempting residents on their main homes.

The European Commission has challenged Spain’s tax treatments deeming the practice to be discriminatory and conflicts with two fundamental EU principles being the free movement of workers and free movement of capital. The commission has warned that the tax may deter non-residents from investing and as such should not be implemented.

The removal of the tax would be a welcome change for UK investors, who are currently subject to the charge. Whether Spain will follow through and remove the tax remains to be seen!

I will be wrong if an ‘Exit Tax’ or ‘Wealth Tax’ is introduced at the Autumn Budget

There has been growing speculation that the upcoming Autumn Budget could see the introduction of new taxes aimed at high-net-worth individuals, including an ‘Exit Tax’ (a levy on unrealised capital gains when leaving the UK) and a traditional ‘Wealth Tax’. While both measures have been widely debated, current signals suggest these headline-grabbing taxes are unlikely. Instead, policymakers may favour subtler reforms, such as freezing allowances, tightening reliefs, or adjusting Capital Gains Tax, pensions, and property taxes to increase revenue without explicitly introducing a wealth levy.

Both approaches risk impacting investor confidence and prompting ‘wealth flight’.

Read more about each of these in my recent updates:

I will be wrong if an Exit Tax is introduced at the Autumn Budget.
Is a Wealth Tax coming to the UK?

Mauritian trusts – Tax overview

Trusts are, in principle, a very simple concept. A trust is a private legal arrangement in which the ownership of someone’s asset (which might include property, shares or cash) is transferred to someone else (usually, in practice, to a licensed trust company) to administer and use to benefit a third person (or group of people).

A Mauritian Trust is taxable at the rate of 15% in Mauritius on its chargeable income but is exempt from Tax in Mauritius if it meets any of the below criteria:

• The trust is not administered in Mauritius and a majority of the trustees are not resident in Mauritius.
• The settlor of the trust was not resident in Mauritius at the time the instrument creating the trust was executed, or at any time that the settlor adds new assets to the trust.
• A majority of the beneficiaries or the class of beneficiaries appointed under the terms of the trust are not resident in Mauritius

In most cases although a trust is administered in Mauritius by a Mauritian licensed trustee, it might not meet the other criteria which will make the trust taxable in Mauritius. For further information, contact Dale International.