Chapter Five - Residence and Domicile

Question 1

What is the difference on taxation for UK and Non-UK Residents for gains and income?

Answer 1

UK Residents pay tax on income/gains within and outside overseas and Non-UK residence only pays tax on UK income and gains

Question 2

What are the three tests for residency?

Answer 2

Test 1: Overseas test, resident overseas?
Test 2: Residence test, resident in the UK?
Test 3: Sufficient ties test, how close to the UK?

Question 3

What are the three areas for automatic overseas test?

Answer 3

UK current tax year = 16 or less days
UK current and non UK previous 3 years = 46 or less days
Overseas employment = 91 or less days with less than 31 days working

Question 4

What are the three areas for automatic UK test?

Answer 4

UK current tax year = 183 or more days
Home in the UK = Must own it for atleast 91 days and live in it for 30 days
Full time UK employment = Year round

Question 5

What are the five ties for Sufficient Ties Test?

Answer 5

1. Having a family in the UK
2. Having accomodation in the UK
3. Working in the UK (40 or more days)
4. Time spent in UK previously (90 or more days within last 2 tax years)
5. Time spent in UK compared to any other country

Question 6

What tax does Domicile link to?

Answer 6

Inheritance Tax

Question 7

What liability does a UK Domicile have on their assets to IHT compared with a non-UK Domicile?

Answer 7

IHT paid on both UK and Overseas for Domicile and on only UK for Non-UK Domicile ``

Question 8

What is your origin domicle?

Answer 8

Normally after your father

Question 9

What is your choice domicle?

Answer 9

Permentantly moving to a new country

Question 10

What is deemed domicle?

Answer 10

Resident in UK for 15 out of last 20 tax years. If you leave countries, deemed domicile for 6 years for income/gains and 4 years for IHT

Question 11

What is the income tax position for a UK resident and UK domicile?

Answer 11

All UK tax on UK and overseas property/assets

Question 12

What is the income tax position for a UK resident Non UK domicile, Non-UK resident and UK Domicile, or non UK resident and domicle?

Answer 12

All UK income from assets/property subject to UK tax

Question 13

What is Remittance Basis?

Answer 13

This is when you are a non domicile or non uk resident and you can elect for your overseas property to only be subject to income tax if it is remitted to the UK i.e. transferred to a UK bank

Question 14

Can you use your personal and CGT allowances when using remittance basis?

Answer 14

No, you cannot use personal or CGT allowance

Question 15

What is the remittance basis?

Answer 15

£30,000 tax charge if UK resident for 7 out of last 9 years
£60,000 tax charge if UK resident for 12 out of last 14 years
Anything over 15 years, become a UK resident so no remittance can be used

Question 16

What tax is a UK resident and UK domicle subject to for CGT?

Answer 16

They will be CGT on worldwide gains

Question 17

What tax is a UK resident but non dom for CGT?

Answer 17

UK gains only

Question 18

What tax is a Non UK resident but UK domcile for CGT?

Answer 18

They have to be a non uk resident for 5 years to escape the CGT

Question 19

What tax is a non uk and non uk domicile for CGT?

Answer 19

They have to be a non uk resident for 5 years to escape

Question 20

When is IHT charged on assets for UK and Oversea residents/domicile?

Answer 20

Always charged, unless you are a non domicile with overseas assets