Ch 7: Overseas aspects Flashcards
What is the difference between residence and domicile?
Residence is determined by statutory tests for each tax year, while domicile is based on general law and considers one’s permanent home.
How many types of domicile are there, and what are they?
- domicile of choice
- domicile of origin
- domicile of dependency
.
How is residence determined for tax purposes?
based on statutory residence tests
- Automatic Overseas Test
- Automatic UK Test
- Sufficient Ties Test.
Can an individual be treated as resident for only part of a tax year?
Yes, in limited circumstances, an individual can be treated as resident for part of a tax year under the split year treatment.
What ties are considered under the Sufficient Ties Test for UK residence?
Ties such as having UK resident
- close family
- UK accommodation available for 91 days
- substantive UK work
- spending more days in the UK than any other country
What are the tax implications for residents and non-residents with respect to their income?
Residents and non-residents are subject to different tax treatments based on their domicile status, with residents usually being taxed on worldwide income and non-residents on income arising in the UK.
How is double tax relief calculated for overseas income?
Double tax relief is calculated as the lower of UK tax on the overseas income and the overseas tax suffered.
What are the tax implications for non-residents disposing of UK property?
Non-residents are subject to capital gains tax on disposals of UK property, with different rules applying to residential and non-residential property.
How are temporary non-residents treated for capital gains tax purposes?
Temporary non-residents are assessed for capital gains tax on disposals of assets owned before they became non-resident and disposed of while they were non-resident.
How is domicile status relevant for inheritance tax?
Domicile status affects whether an individual’s worldwide assets or only their UK assets are subject to inheritance tax. Deemed domicile rules may also apply in certain circumstances.
What is the purpose of double tax relief in inheritance tax?
Double tax relief is given as a tax credit against the inheritance tax payable on overseas assets, providing relief for taxes paid in foreign jurisdictions.
