Chapter 5 - Residence & Domicile Flashcards
Residence and Domicile definition
Automatically not resident in uk when;
- UK fewer days, tax years and days, overseas and days
Residence - status in that tax year
Domicile - country regarded as permanent home
Automatically not resident in the uk - auto not treated as resident when;
- in the UK for fewer than 16 days in that tax year
- not resident for last three tax years and current one for fewer than 46 days
- full time work overseas if they are in uk fewer than 91 days and fewer than 31 days working in the uk
Residence in the UK - automatic resident when;
- more than (days), home and days and work
Automatic resident in the UK;
- more than 183 days in that tax year
- home in the UK but must live at home for 91 consecutive days with at least thirty in one tax year and must be present in overseas home for fewer than 30 days during that 91 day period
- full time work in the UK
Split year treatment - resident year can be split into two parts when;
- work, leave, if coming? And spouse
Resident year can be split into two parts;
- leave or join UK for work
- leave uk to live overseas and sells home
- if coming to UK must be for full time work or meeting only UK home test
- can also apply to spouse accompanying
Sufficient UK Ties test - when used? Five potential ties;
- family, accommodation, working days, time in UK and time in general
Application of this test depends on? And example (leaving)
How many days discarded as part of what
If they do not meet auto tests then determined using this. Five potential ties including;
- have a spouse or child
- having accommodation in the UK (not include let out, hotels or family)
- working 40 or more days during tax year in UK
- spending more than 90 days in UK during either of the two previous years
- more time in UK than any other country
How this is applied depends on whether person has been resident in previous three tax years. If spent past 3 years here and leaving then all five irrelevant.
Individuals can discard up to 60 exceptional days per tax year.
Domicile - of origin;
- take who’s? And up to what age and wife’s
domicile of choice;
- how new dom, voting, abandoned when? (2)
Deemed domicile;
- resident how many years (fraction), birthplace, taxation if deemed (income, CGT and IHT) and UK status lost when for IHT (years)
Domicile of origin;
- usually takes father’s domicile, domicile follows relevant parent up to 16 and wife’s is independent of husbands (if married pre 1974 then takes husbands)
Domicile of choice;
- new domicile by moving country
- voting in UK not taken into account when determining domicile
- abandoned if individual no longer lives there or intends to live elsewhere permanently
Deemed domicile in UK if;
- resident for 15 out of 20 previous tax years (remain domicile for tax and CGT for next six tax years if this is the case)
- born in uk and return
- if deemed subject to income, CGt and IHT same as UK domicile
- UK status lost 4 years out of country for IHT
Tax Liabilities for UK domiciled - rebase CGT;
- can do this when and what is it
Rebase CGT - if deemed UK domicile due to 15/20 year rule then can rebase overseas asset to market value at 04/17 therefore gains accrued up to this date not charged.
UK resident pays tax as you’d expect apart from the above (inc, CGT & IHT)
Tax liabilities -not resident;
- income tax - self employed, overseas investment income, pensions (inc state) and property income
- CGT - not liable unless, reside outside uk for no CGT (years), uk property
Income tax - self employed pay on profits if operating in uk
- no income tax for overseas invest income if not resident
- uk SP and pensions are taxable but not overseas pensions
- Property UK income taxable
CGT - not liable unless temp non-residents
- must reside outside UK for five years before no CGT
- disposal taxable if non-resident using UK agency
- liable when disposing uk property
Liability to tax of non-uk domiciled individuals - remittance basis - when does this happen and what is it, treated on this basis when, includes what and allowances
- domiciled outside UK must be taxed on remittance basis (i.e. only pay tax on income derived in UK)
- income and gains treated as remitted in UK if money or property is received and derived from the UK.
- this includes gifts to another
- individuals who pay tax on remittance basis don’t get PA or AEA
Annual tax charge for remittance basis - 7/9 tax years = ?, 12/14 tax years =?, paid in addition to what and how paid
Does not apply for - age, under what amount and worldwide
There is an annual tax charge for adults who have been resident in the UK for at least 7/9 previous tax years;
- £30k for above
- £60k for 12/14 tax years
- paid in addition to remitted tax on income and gains
- is paid via SA
Does not apply for;
- individuals under the age of 18
- unremitted income is under £2k for that tax year
- if pay tax on worldwide income or gains that tax year
Resident but not domiciled income taxation - income tax?, CGT and more than? And IHT only charged on…?
Not resident or domicile - income tax for… (3) and IHT for what
Resident but not domiciled;
- Income fully taxable
- subject to CGT on gains (must be more than £2k)
- IHT only charged on transfers of property situated in the UK
Neither;
- income tax on UK investment income, employment, property income
- IHT on gifts situated in the UK
Self assessment - must complete what and when (2, think residency)
- if they do not complete these?
- do not need to complete tax return when (income and bank interest)
Must complete non-residence supplementary pages if they consider themselves to be;
- non UK resident, resident in the UK for part of the tax year under split year and not domiciled in UK and is relevant to their income and CGT liability.
If they do not complete these, they will be treated as resident and domiciled in the UK and therefore declare worldwide income and gains.
No need to file tax return if income is below £10k and overseas bank interest of less than £100 if subject to foreign tax.
Double taxation relief - what is it
Eligible for exemption on employment income if;
- uk days, employer residency and fixed base
overseas not subject to CGT on disposals when?
Non residents from country with double tax treaty may be able to claim exemption on income tax and CGT.
Can be eligible for exemption on employment income if;
- cannot be in UK more than 183 days specific in treaty
- employer must be non-resident
- self-employed must not operate from fixed base
Not subject to CGT if disposed assets situated outside UK
