Chapter 9: Taxation (2) Flashcards
What are the main taxes that affect private investors?
- Income tax
- Inheritance tax (IHT)
- Stamp duty
- Capital gains tax (CGT)
What is a domicile?
The country that a person treats as their permanent home, or lives in and has a substantial connection with.
What are the 3 types of domicile?
- Domicile of origin
- Domicile of choice
- Domicile of dependency
What is a ‘Domicile of origin’?
The domicile someone acquires at birth.
What is a ‘Domicile of choice’?
This is acquired by a person residing in a country with the intention of continuing to do so permanently/indefinitely.
What is a ‘Domicile of dependency’?
Arises with respect to children, married women and mentally disordered persons. Their domicile will be the same as the domicile of the person whom they’re legally dependent of.
What areas of law is domicile important for?
It’s the link between a person and the legal system that applies to issues regarding:
* Matrimonial
* Legitimacy
* Succession
* Tax
What is domicile important in determining?
- Who has the right to inherit assets at death.
- The form of any will or testamentary dispositions that are permitted.
- Who inherits if there is no will.
- How much IHT is payable and where.
Which factor decides what tax is paid on what types of income and gains?
A persons residency status.
Which factors influence the definitions of residency?
- Physical residency
- Ownership of property
- Availability of accommodation
What do individuals who are not a resident in an country for a complete tax year need to do?
Exercise particular care in understanding the rules and ensure that their visits do not exceed the maximum time permitted.
In the UK, which income do residents pay tax on?
On all their income, UK or abroad.
Which income do UK residents whose domicile is abroad and non-residents pay?
They only pay on their UK income - don’t pay tax on their overseas income.
What automatically qualifies someone as a UK resident?
- You spent 183+ days in the UK tax year.
- Your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total and spent at least 30 days there in the tax year.
What automatically qualifies someone as a non-resident?
- Spent fewer than 16 days in the UK (or 46 days if you’ve not been classed as UK resident for 3 previous tax years).
- You work abroad full time (avg 35+ a week) and spent fewer than 91 days in the UK, which no more than 30 were working.
