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R3 > Ch 5 - Res & domicile > Flashcards

Ch 5 - Res & domicile Flashcards

1
Q

What is the difference between residence and domicile?

A 
Residence = status in any on tax year
Domicile = permanent home
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2
Q

What makes someone automatically not resident in the UK?

A
  • Less than 16 days in UK in tax year
  • Not resident for the 3 prev tax years and have spent less than 46 days in UK in current tax year
  • Full time work abroad, in UK < 91 days in tax year, < 31 days working in UK in tax year
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3
Q

What is considered full time?

A

35 hours p/week

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4
Q

What is considered a working day?

A

> 3 hours work

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5
Q

What make someone automatically resident in UK?

A
  • In the UK for 183 days or more
  • Full time work in UK
  • Only home is in UK (owned 91 consecutive days and have been present in that home for min 30 days)
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6
Q

What is counted as a day of presence?

A

There at midnight

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7
Q

When may split year treatment be used?

A
  • Leaves the UK to work fulltime overseas
  • Comes to the UK to work fulltime
  • Leaves to live abroad and has no homes in UK
  • Comes to live in UK/meets the only UK home test
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8
Q

Does split year treatment apply to spouses?

A

Yes

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9
Q

What are the 5 sufficient ties tests?

A
  1. Spouse/civil partner/minor children in UK
  2. Accommodation in UK made use of during year
  3. 40 or more days work in tax year
  4. > 90 days in UK during either previous two years
  5. More time in UK than any other country
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10
Q

Residency for a tax year is determined by what?

A

Number of days spent in UK against how many ties they have

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11
Q

How many ties are required for a 16-45 days spent in the UK?

A

Resident: 4

Non-resident: Automatically not resident

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12
Q

How many ties are required for a 46-90 days spent in the UK?

A

Resident: 3

Non-resident: 4

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13
Q

How many ties are required for a 91-120 days spent in the UK?

A

Resident: 2

Non-resident: 3

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14
Q

How many ties are required for a 121-182 days spent in the UK?

A

Resident: 1

Non-resident: 2

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15
Q

How many days residency can be disregarded by HMRC in exceptional circumstances?

A

60

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16
Q

When will the Deeming Rule apply?

A
  • 3 or more UK ties for the tax year
  • Been present in the UK for 30 days or more without being present at midnight, known as qualifying days
  • Been UK resident in at least one of the previous 3 tax years
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17
Q

What does it mean if someone meets the Deeming Rule conditions?

A

After the first 30 qualifying days, all subsequent qualifying days will be treated as a day of presence

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18
Q

Whose domicile do children normally take in England & Wales?

A

Usually takes the father’s domicile

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19
Q

A child’s domicile follows their parents until what age?

A

16

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20
Q

When does a domicile of choice occur?

A

Moving to new country with intention of permanently living there

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21
Q

When are you deemed a UK domiciled resident? (amount of years)

A

15 out of last 20 tax years

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22
Q

When a UK domiciled individual has domicile of choice in another country, they are still treated as being UK domiciled for a further how many calendar years?

A

3

23
Q

An individual who is not domiciled in the UK is deemed domiciled in the UK if?

A

1) 15/20 years resident

2) Born with UK domicile and return, having obtained domicile of choice elsewhere

24
Q

What are the tax implicates of somebody being deemed UK Domicile?

A

Liable to income tax/CGT.

IHT purposes = also been resident in the UK for at least 1 out of the previous 2 tax years

25
Q

If someone is deemed domicile by the 15/20 years rule, then for income tax and CGT purposes, they will remain deemed domiciled for how many years after leaving UK?

A

6 years

26
Q

For IHT, UK deemed domiciled status is lost once an individual has been a non-resident for at least how many consecutive years?

A

4

27
Q

What is the liability to tax for a UK resident/UK domicile?

A

Income tax: Worldwide* (*eligible for remittance)

CGT: Worldwide* (*if deemed domicile 15/20 yrs rule, can rebase to market value)

IHT: UK & Worldwide

28
Q

What is the liability to tax for a non-UK resident with UK domicile?

A

Income tax: UK = liable. Outside UK = not liable.

CGT: Generally not liable unless temporary non-resident. Liable on UK property.

IHT: UK = liable. Foreign = not liable.

29
Q

When are income and gains treated as remitted to UK?

A

Bring them directly/indirectly to the UK so you or a relevant person can enjoy the benefits in the UK

30
Q

What are the remittance exemptions?

A
  • Personal effects
  • Assets costing < £1000
  • Assets brought into UK for repairing
  • Assets in UK for < 275 days
  • Art for public display
  • Income and gains that are remitted to the UK for the purpose of commercial investment in a qualifying company
31
Q

What is the annual tax charge?

A

Resident 7/9 years = £30,000

Resident 12/14 = £60,000

32
Q

Does the annual tax charge apply to under 18s?

A

No

33
Q

Unremitted gains are exempt from annual tax charge if less than?

A

£2000

34
Q

If remittance basis is claimed, what allowances are not available/

A

Personal allowance & CGT allowance

35
Q

If someone is UK domicile and UK resident, what are the rules with CGT?

A

Liable on worldwide gains

36
Q

If someone is UK domicile and not-UK resident, what are the rules with CGT?

A

Not liable unless temporary non-resident excluding property)

37
Q

If someone is non-UK domicile and UK resident, what are the rules with CGT?

A
  • Liable on UK gains and gains remitted to UK

- If no remittance, worldwide gains

38
Q

If someone is non-UK domicile and non-UK resident, what are the rules with CGT?

A

Not liable unless temporary non-resident excluding property)

39
Q

What is the IHT treatment on UK assets if UK domicile?

A

Liable

40
Q

What is the IHT treatment on foreign assets if UK domicile?

A

Liable

41
Q

What is the IHT treatment on UK assets if non-UK domicile?

A

Liable

42
Q

What is the IHT treatment on foreign assets if non-UK domicile?

A

Not liable

43
Q

Is resident status relevant to IHT?

A

No - except in determining deemed domicile

44
Q

Under self assessment, who is liable to determining domicile status?

A

The individual

45
Q

No tax return is required if overseas employment income is less than?

A

£10,000

46
Q

The non-residence supplementary pages must be completed if an individual considers themselves to be what?

A
  • Not UK resident
  • Resident in the UK for only part of the tax year under split year treatment
  • Not domiciled in the UK and it is relevant to their income tax or CGT liability
47
Q

What happens if the non-residence pages are not completed on a self assessment return?

A

Treated as UK resident/domiciled and must declare worldwide income and gains

48
Q

What is double taxation relief?

A

Most double taxation treaties lay down a process for determining a single residence where an individual may be considered resident in several countries

49
Q

Residents in an overseas country may qualify for an exemption from UK tax on what?

A
  • Earnings from employment carried on in the UK

- Profits or earnings for independent, personal or professional services carried on in the UK

50
Q

An individual who is a resident of a country with which the UK has a double tax treaty may be able to claim what?

A

claim an exemption from UK tax on some types of income and gains from UK sources

51
Q

Non-residents generally pay what on any dividends they have received?

A

Generally do not pay UK income tax on dividends

52
Q

How can double taxation treaties affect CGT paid?

A
  • (Disposal outside UK) If a gain arises in country where a double tax treaty is in place with the UK, it will not be subject to UK CGT, even if the individual is a UK resident
  • Make foreign tax credit against UK tax (if foreign > UK, excess cannot be repaid)
53
Q

When are offshore trust subject to UK income tax?

A

When trustee is UK resident

54
Q

What CGT is an offshore trust subject to?

A

Not subject to UK CGT, but anti-avoidance legislation can result in the gains being taxed on the settlor or beneficiary in the same way as above

R3 (10 decks)

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