Chapter 5 - Residence and domicile

Question 1

Which of these forms of foreign income received by Patty is NOT eligible to be taxed on the remittance basis?

Select one:

a. Income from self-employment carried on in the Republic of Ireland.
b. Pension income from her previous employer in France.
c. Income from working in Belgium for a Belgian employer.
d. Investment income arising in Switzerland.

Answer 1

a. Income from self-employment carried on in the Republic of Ireland.

chapter reference 5D3A

Question 2

Gloria, a Spanish resident, arrives in the UK to start a contract of employment on 1 July 2021 which ends on 6 August 2022. She expects:

Select one:

a. not to be a UK tax resident as she was not in the UK for previous tax years.
b. not to be a UK tax resident as she arrived part way through the tax year.
c. to be a UK resident as she is from another European state.
d. to be a UK tax resident as she is in the UK for at least 183 days in 2021/22.

Answer 2

d. to be a UK tax resident as she is in the UK for at least 183 days in 2021/22.

Correct, chapter reference 5A2

Question 3

Sunil has just arrived in the UK to take up employment. He has not been resident in the UK before. What factor would NOT be taken into account in determining his residency in the UK for tax purposes?

Select one:

a. Having accommodation in the UK which he has used.
b. Spending 60 days in the UK during either of the two previous years.
c. Doing substantive work in the UK.
d. Having a spouse resident in the UK.

Answer 3

b. Spending 60 days in the UK during either of the two previous years.

chapter reference 5A5

Question 4

Sharon spends 190 days in the UK in the current tax year. For tax purposes, this means that she will be treated as UK resident:

Select one:

a. if she has more than 3 UK ties.
b. if she has more than 4 UK ties.
c. if she has more than 2 UK ties.
d. automatically.

Answer 4

d. automatically.

Correct, chapter reference 5A2

Question 5

Debra has not been resident in the UK for five years but has had a 40 day holiday in the UK in the current tax year. Debra should be aware that:

Select one:

a. she is automatically non-resident in the UK for the current tax year.
b. she is automatically resident in the UK for the current tax year.
c. her residency in the UK for the current tax year will depend on whether she has a UK home.
d. her residency in the UK for the current tax year will depend upon her domicile.

Answer 5

a. she is automatically non-resident in the UK for the current tax year.

chapter reference 5A1

Question 6

Pierre was born in Belgium and has moved to the UK where he intends to remain. If he is deemed to be domiciled in the UK, this means he will be subject to UK:

Select one:

a. inheritance tax only.
b. income tax, capital gains tax and inheritance tax.
c. income tax only.
d. income tax and capital gains tax only.

Answer 6

b. income tax, capital gains tax and inheritance tax.

Correct, chapter reference 5B3

Question 7

Wesley, who is 14, was born in Spain shortly after the death of his father, who was Belgian. His mother was domiciled in France at that time but is now UK domiciled living in England. In which country is Wesley most likely to be domiciled?

Select one:

a. Belgium.
b. France.
c. United Kingdom.
d. Spain.

Answer 7

c. United Kingdom.

chapter reference 5B1

Question 8

Sanjay was born to an Indian father and a Welsh mother. His father died when he was aged 7 and they then moved to England to live. As Sanjay is now aged 15, what is his domicile?

Select one:

a. Welsh.
b. He has the right to choose.
c. Indian.
d. English.

Answer 8

c. Indian.

chapter reference 5B1

Question 9

Toby both lives and runs his own management consultancy business in France, having done so for the last 4 years. He also earns £20,000 per annum for 15 days’ consultancy work in the UK, as well as receiving an additional £1,500 per year in investment income from his UK government securities. His UK related income is:

Select one:

a. subject to income tax as Toby is resident in the UK.
b. subject to income tax, regardless of Toby’s residence.
c. not subject to income tax, regardless of Toby’s residence.
d. not subject to income tax as Toby is not resident in the UK.

Answer 9

d. not subject to income tax as Toby is not resident in the UK.

chapter reference 5C2A

Question 10

Grace has been resident in the UK for five years and is domiciled outside the UK. She owns substantial property and business interests in France, the income from both of which is paid into her UK bank account. How will this income and any gains from these assets be treated for tax purposes if she is taxed on the remittance basis?

Select one:

a. The income will be subject to income tax, and any gains will be subject to capital gains tax.
b. The income will be subject to income tax, but any gains will not be subject to capital gains tax.
c. The income will not be subject to income tax, but any gains will be subject to capital gains tax.
d. The income will not be subject to income tax, and any gains will not be subject to capital gains tax.

Answer 10

a. The income will be subject to income tax, and any gains will be subject to capital gains tax.

chapter reference 5D3

Question 11

Hazel has just left the UK to take up a new job in Australia. What ties could be applied in order to establish her residency in the UK for tax purposes in the current tax year?

Select one:

a. An adult child resident in the UK, working for 40 days or more during the tax year, with accommodation in the UK which is used, spending more time in the UK compared to other countries.
b. A spouse resident in the UK, accommodation in the UK which is used, and spending more time in the UK than any other single country.
c. A spouse resident in the UK, spending more time in the UK compared to other countries, and working for 40 days or more in the UK during the last 2 years.
d. A spouse resident in the UK, accommodation in the UK which is let out, and spending more time in the UK compared to other countries.

Answer 11

b. A spouse resident in the UK, accommodation in the UK which is used, and spending more time in the UK than any other single country.

chapter reference 5A5

Question 12

Under double taxation treaties, what type of income will typically receive some relief from UK tax?

Select one:

a. Property letting income.
b. Personal pension income.
c. UK Government pensions.
d. Employment income.

Answer 12

b. Personal pension income.

chapter reference 5F2

Question 13

Hugo is 10 years old and was born in the United Kingdom. His mother was born in Japan and his father was born in Canada. Hugo’s domicile is:

Select one:

a. United Kingdom.
b. Hugo’s choice.
c. Canada.
d. Japan.

Answer 13

c. Canada.

chapter reference 5B1

Question 14

Dirk is non-UK domiciled and has set up an offshore trust with no UK trustees. If Dirk can benefit from the trust, under UK anti-avoidance legislation:

Select one:

a. trust income and gains are not attributed to him.
b. trust income could be attributed to him.
c. inheritance tax on the trust could be payable by him.
d. trust gains only could be attributed to him.

Answer 14

b. trust income could be attributed to him.

chapter reference 5H

Question 15

An individual with overseas employment income is NOT required to file a self-assessment tax return, provided that the income is:

Select one:

a. subject to foreign tax and is less than the personal allowance.
b. paid with no deduction of tax and is less than £11,000.
c. paid with no deduction of tax and is less than £10,000.
d. subject to foreign tax and is less than £10,000.

Answer 15

d. subject to foreign tax and is less than £10,000.

chapter reference 5E

Question 16

Josef, 34, has been resident in the UK for 12 continuous tax years. If he chooses to claim the remittance basis he will be subject to an annual tax charge of:

Select one:

a. £50,000.
b. £90,000.
c. £30,000.
d. £60,000.

Answer 16

d. £60,000.

chapter reference 5D2

Question 17

Peter is UK domiciled, has been resident in the UK for the past three tax years and has his only home here. If he starts working for a Paris-based firm where he has his desk, but still does most of his work in the UK, he is:

Select one:

a. non-resident for tax purposes.
b. UK resident but could claim the remittance basis with charge.
c. UK resident but could claim the remittance basis without charge.
d. still UK resident for tax purposes.

Answer 17

d. still UK resident for tax purposes.

chapter reference 5A2

Question 18

Which of these individuals will NOT automatically be treated as being non-resident for tax purposes?

Select one:

a. Ricardo, who spends the last two weeks of March in the UK every year.
b. Selina, who spends 180 days in the UK every year, and the rest of the time outside the EU.
c. Vasoulla, who is a new visitor to the UK, is spending six weeks working in London over the summer.
d. Spencer, whose job is in Norway but he comes to the UK every month for two days.

Answer 18

b. Selina, who spends 180 days in the UK every year, and the rest of the time outside the EU.

chapter reference 5A1

Question 19

An individual would automatically be non-resident if they were not resident in the UK for any of the previous three tax years, and spent fewer than:

Select one:

a. 46 days in the UK in a tax year.
b. 31 days in the UK in a tax year.
c. 91 days in the UK in a tax year.
d. 183 days in the UK in a tax year.

Answer 19

a. 46 days in the UK in a tax year.

chapter reference 5A1

Question 20

Gerard is domiciled in France and is non-resident for UK income tax purposes. He owns a house in Paris, a flat in London and a villa in Miami. Which of these properties, if any, would be subject to UK inheritance tax on his death?

Select one:

a. The London flat and the Paris house.
b. All three properties.
c. The London flat only.
d. The London flat and the Miami villa.

Answer 20

c. The London flat only.

chapter reference 5D3C

Question 21

For income tax purposes, the tax year may NOT be split into two parts for:

Select one:

a. Claire, who left the UK in October 2021 to start a new full-time job in Cyprus.
b. Eileen, who has just retired to Spain, giving her UK home to her daughter.
c. Ruth, who is a UK resident, but who works some of the year in Switzerland.
d. Mario, who moved to the UK in June 2021 to live and work full-time.

Answer 21

c. Ruth, who is a UK resident, but who works some of the year in Switzerland.

chapter reference 5A4

Question 22

Under UK residency tax laws, it is possible to have:

Select one:

a. dual domicile and dual residence.
b. dual residence and dual nationality.
c. dual domicile.
d. dual nationality and dual domicile.

Answer 22

b. dual residence and dual nationality.

chapter reference 5B

Question 23

Georgina has been resident in the UK for 10 years, but is domiciled in Greece and has property and assets all over the world. On her death, inheritance tax may be due to the UK tax authorities:

Select one:

a. on none of her assets.
b. only on property and assets situated in the UK.
c. on any assets she holds jointly with UK domiciled individuals.
d. on her worldwide assets if she has ever been UK domiciled during her adult life.

Answer 23

b. only on property and assets situated in the UK.

chapter reference 5D3C

Question 24

Michael is not currently resident in the UK. He has disposed of an investment property and has found that he is still liable for capital gains tax in the UK. This is because he moved away:

Select one:

a. four and a half years ago.
b. seven and a half years ago.
c. five and a half years ago.
d. six and a half years ago.

Answer 24

a. four and a half years ago.

Correct, chapter reference 5C2C

Question 25

If Rafa is non-UK resident and owns shares in a UK based company, he:

Select one:

a. will not typically pay UK income tax on the dividends received.
b. may not pay UK income tax on the dividends received depending on whether a double taxation agreement is in place.
c. will pay the difference between any withholding tax and the UK basic rate tax liability on any dividends received.
d. will typically pay UK income tax on the dividends received.

Answer 25

a. will not typically pay UK income tax on the dividends received.

Correct, chapter reference 5F5

Question 26

Beverley has just settled £100,000 into a trust which was set up in Switzerland. The beneficiaries of the trust are her five UK resident grandchildren. Beverley and the other two trustees are non-UK residents. What is the situation for any potential capital gains tax liability on gains made within this trust?

Select one:

a. The trust is not subject to UK capital gains tax, but her grandchildren may suffer a capital gains tax charge on receipt of any trust capital.
b. The trust is subject to UK capital gains tax due to the residence status of the five beneficiaries.
c. The trust is not subject to UK capital gains tax under any circumstances due to the residence status of the trustees.
d. The trustees can elect whether the trust is to be taxed under Swiss tax laws or UK tax laws at the time the trust is created.

Answer 26

a. The trust is not subject to UK capital gains tax, but her grandchildren may suffer a capital gains tax charge on receipt of any trust capital.

chapter reference 5H

Question 27

Carol was resident in the UK all of her life until June 2019 when she emigrated to Spain. She still has two properties in the UK, from which she receives rental income, and significant shareholdings from which she receives dividends. With any gains on the sale of these UK assets, she may avoid capital gains tax:

Select one:

a. on the properties if she sells them before she returns to the UK.
b. on the shares if she does not return to the UK before June 2024.
c. on the properties and the shares if she remains non-resident for at least 4 years.
d. altogether if she never returns to the UK.

Answer 27

b. on the shares if she does not return to the UK before June 2024.

Correct, chapter reference 5C2C

Question 28

Rachel is an Irish citizen and is attending a 12 month university course in England. She intends to return home when she completes her course. For income tax purposes, Rachel is currently regarded as:

Select one:

a. non resident in the UK.
b. resident in the UK.
c. temporarily domiciled in the UK.
d. domiciled in the UK.

Answer 28

b. resident in the UK.

chapter reference 5A2

Question 29

Mark is neither resident nor domiciled in the UK. He owns an office building in the UK, which he rents out. As far as UK tax is concerned, he may be liable for:

Select one:

a. inheritance tax only on death.
b. income tax on the rent from the office, capital gains tax on the sale of the property, and inheritance tax on the property on death.
c. income tax on the rent from the office, inheritance tax on death, but no capital gains tax on the sale of the property
d. income tax only on the rent from the office.

Answer 29

b. income tax on the rent from the office, capital gains tax on the sale of the property, and inheritance tax on the property on death.

chapter reference 5D4

Question 30

Seb is 9 and was born in Singapore to UK domiciled parents who have just established domicile in Australia. Seb is now:

Select one:

a. UK domiciled.
b. Australian domiciled.
c. able to choose his domicile.
d. Singapore domiciled.

Answer 30

b. Australian domiciled.

chapter reference 5B1

Question 31

Sanjay has been resident in the UK for the past 8 years but is non-UK domiciled. He is intending to remit funds to the UK to invest in an AIM listed company. For Sanjay to benefit from an exemption from the remittance rules the funds needs to be invested in the AIM listed company within:

Select one:

a. 45 days.
b. 183 days.
c. 90 days.
d. 30 days.

Answer 31

a. 45 days.

chapter reference 5D1

Question 32

A non-UK domiciled individual who claims the remittance basis will:

Select one:

a. not normally be entitled to the income tax personal allowance or the capital gains tax annual exempt amount.
b. have to pay a charge of £30,000 once they have been resident in the UK for at least five out of the previous seven years.
c. have foreign earnings that are less than £2,000 in a tax year.
d. have to pay the annual tax charge if they are over age 16.

Answer 32

a. not normally be entitled to the income tax personal allowance or the capital gains tax annual exempt amount.

chapter reference 5D2

Question 33

Pierre, a French resident, travels to the UK to start a contract of employment on 1 July 2021 which ends on 6 August 2022. He is expected to be:

Select one:

a. UK tax resident as he is in the UK for at least 183 days.
b. not UK tax resident as he lives in rented accommodation.
c. UK tax resident as he is in the UK for at least 91 days.
d. not UK tax resident as he was non resident in the previous three tax years.

Answer 33

a. UK tax resident as he is in the UK for at least 183 days.

Correct, chapter reference 5A2

Question 34

If each of these individuals who claim the remittance basis have received notification from HMRC that they will have to pay an annual tax charge, who will pay the highest amount?

Select one:

a. Pierre, who has been resident in the UK for the last year.
b. Lorenzo, who has been resident in the UK for the last 14 years.
c. Maria, who has been resident in the UK for the last 11 years.
d. Stavros, who has been resident in the UK for the last 8 years.

Answer 34

b. Lorenzo, who has been resident in the UK for the last 14 years.

chapter reference 5D2

Question 35

Toby has lived in the Netherlands for the last 4 years and earns £20,000 per annum for 20 days’ consultancy work in the UK. He also receives an income of £1,000 per annum from his holdings in UK government securities. This income is NOT subject to UK tax because Toby is:

Select one:

a. not a UK national.
b. not resident in the UK.
c. not UK domiciled.
d. resident in the UK.

Answer 35

b. not resident in the UK.

chapter reference 5C2A

Question 36

Stan was previously UK resident but has worked for an overseas company for the last couple of years. He still spends a varying number of days in the UK each year. Under what circumstances would he be expected to show he has at least three ties to the UK in order for him to be considered a UK resident for tax purposes?

Select one:

a. If he were to spend between 91 and 120 days in the UK during a tax year.
b. If he were to spend between 121 and 182 days in the UK during a tax year.
c. If he were to spend between 46 and 90 days in the UK during a tax year.
d. If he spent less than 45 days in the UK during a tax year.

Answer 36

c. If he were to spend between 46 and 90 days in the UK during a tax year.

chapter reference 5A5

Question 37

Frank is a UK resident and is employed on a part-time basis by a company based in France. The firm pays him in Euros and deducts income tax under the French tax system. What UK requirements, if any, will Frank need to meet?

Select one:

a. There is no requirement for him to file a UK tax return providing the income is less than £10,000 per annum.
b. A UK tax return is always required when a UK resident has foreign income if his income exceeds £15,000 per annum.
c. There is no requirement for him to file a UK tax return providing the income is less than £15,000 per annum.
d. A UK tax return is always required when a UK resident has foreign income irrespective of the amount of income.

Answer 37

a. There is no requirement for him to file a UK tax return providing the income is less than £10,000 per annum.

chapter reference 5E

Question 38

Sam has come to the UK to study and expects to be here for at least three years before returning to Australia. He will be regarded as:

Select one:

a. non-UK resident.
b. resident and ordinarily resident in the UK.
c. resident in the UK.
d. ordinarily resident in the UK.

Answer 38

c. resident in the UK.

chapter reference 5A2