Chapter 5 - Residence and Domicile

Question 1

What are the conditions for being automatically not resident in the UK?

Answer 1

• In the UK fewer than 16 days
• Not resident for any of the last 3 tax years and in the UK for less than 46 days
• Work full time overseas and in the UK for fewer than 91 days, working for less than 31 days

Question 2

What are the conditions for being automatically resident in the UK?

Answer 2

• In the UK for 183 days or more
• Work full time in the UK
• Have a home in the UK. Not straight forward but must have for 91 consecutive days and be present for 30 of those

Question 3

What is classes as a day in the UK for residentially purposes?

Answer 3

Any day in which an individual is present at midnight

Question 4

If none of the automatic tests are met then an individuals residency is based on sufficient UK ties. What are the UK ties?

Answer 4

• Having a spouse in the UK
• Having accommodation in the UK, used during the year
• Substantive work in the UK, defined as 40 days or more
• Spending more than 90 days in the UK in either of previous 2 years
• Spending more time in the UK than any other country

Question 5

For someone who has been resident in the UK before how many days do they need to be in the UK with how many UK ties to be considered UK resident?

Answer 5

16 - 45 days = 4 UK ties
46 - 90 days = 3 UK ties
91 - 120 days = 2 UK ties
Over 120 days = 1 UK ties

Question 6

For someone who has been resident in the UK before how many days do they need to be in the UK with how many UK ties to be considered UK resident?

Answer 6

45 days or below = automatically not resident
46 - 90 days = 4 UK ties
91 - 120 days = 3 UK ties
Over 120 days = 2 UK ties

Question 7

What does domicile refer to?

Answer 7

a persons natural home and where they would expect to return if they went abroad

Question 8

What are the two types of domicile?

Answer 8

• Domicile of origin

* Domicile of choice

Question 9

What is domicile of origin?

Answer 9

At birth a person takes their fathers domicile. This applies until 16. If illegitimate or father is dead they can take the mothers. Wife’s domicile is independent from husband but if married before 1974 she adopted her husbands.

Question 10

What is domicile of choice?

Answer 10

An individual  can acquire a new domicile by moving to a new country with the intention of living their permanently.  No set rules but typically would really need to evidence why you won’t be returning to your origin.
•	Living there
•	Intention to stay
•	Buying a house
•	Locally valid will and burial plot
•	Citizenship or nationality
•	Voting there
•	Breaking ties with origin country

Question 11

If an individual has been resident in the UK for 15/20 last tax years what would happen to their domicile status?

Answer 11

They would be deemed domicile for IHT purposes.

Note this changed from 17/20 tax year 2017/18

Question 12

What would a UK domiciled individual who is resident in the UK pay income tax on?

Answer 12

Worldwide assets and investment income, even if this is not brought into the UK

Question 13

What would a UK domiciled individual who is resident in the UK pay capital gains tax on?

Answer 13

Worldwide gains

Question 14

What would a UK domiciled individual who is resident in the UK pay IHT on?

Answer 14

Worldwide assets

Question 15

What would a non UK domiciled individual who is resident in the UK pay income tax on?

Answer 15

Income arising in the UK if claiming remittance basis. Worldwide assets and income if not claiming remittance

Question 16

What would a non UK domiciled individual who is resident in the UK pay capital gains tax on?

Answer 16

UK gains

Question 17

What would a non UK domiciled individual who is resident in the UK pay IHT on?

Answer 17

UK assets

Question 18

What would a non UK domiciled individual who is not resident in the UK pay IHT on?

Answer 18

Typically only the following;

UK investment income
Employment duties carried out in the UK
Income tax on income from properties in the UK
IHT on gifts of assets in UK

Question 19

What is the remittance basis?

Answer 19

It allows non domiciled UK residents to be taxed only on the income they bring into the UK.

Question 20

What are the charges for claiming the remittance basis?

Answer 20

Zero for the first 7 years

£30,000 if resident for 7/9 last tax years

£60,000 if resident 12/14 last tax years

This charge is paid per year

Question 21

What is a double tax treaty?

Answer 21

Agreements the UK has with other countries to ensure that the same income is not taxed twice in 2 different countries