Domicile Flashcards
What is the annual tax charge in relation to domicile?
For adults resident in UK for at least 7 out of the previous 9 tax years and who claim remittance basis
£30,000 7/9
£60,000 12/14
Tax charge in the unremitted income foreign income and gains left outside UK
In addition to tax paid on remitted income and gains
When does annual tax charge (domicile) not apply?
Individuals under 18
Unremitted foreign income and gains of less than £2000 in a tax year
Can be avoided by not claiming remittance basis for any particular year
How are foreign income and gains taxed for uk resident domiciled elsewhere?
2 options:
Taxable in uk on an arising basis
Unless opts for remittance basis of taxation where gains are more than £2,000 - loses Personal allowance and CGT exempt amount.
only gains/income remitted to the uk will be taxable
Can get relief via double taxation agreement
If resident for 7/9 previous tax years the remittance basis charge will apply £30,000 (12/14 £60,000)
Which individuals will always be treated as non-resident:
Automatic not resident:
In UK for fewer than 16 days in the tax year and UK resident for one or more of the previous 3 tax years
Not resident in UK for any previous 3 tax years and is in UK fewer than 46 days in current tax year
Works full time over seas (35 hours a week employee or self-employed) as long as in UK fewer than 91 days in tax year or spends fewer than 31 days in tax year working in UK
Who is automatically resident?
In UK for 183 days or more in tax year
Home in the UK - have home for at least 91 consecutive days of which 30 are within tax year and be present in it for 30 days - if has overseas home during 91 days they must be present for fewer than 30 days. Don’t have to own the home.
Carries out full time work in UK 365 days - only needs to be partly in the tax year
If someone doesn’t meet automatic residence status what is the sufficient ties test?
- Having a spouse/CP/minor children resident in uk
- Accommodation in UK of which use is made in the year
- Substantive work in UK - 40 or more days during tax year
- More than 90 days in UK during either two previous tax years
- More time in UK than any other single country
It is applied depending on whether someone has been resident in UK for any of the previous 3 tax years
When is someone deemed domicile in UK?
Resident in UK for at least 15 out of previous 20 tax years
Born in the UK with a UK domicile of origin and return to the UK having obtained domicile of choice elsewhere
Income tax and CGT for uk residents who then elect to be UK domicile on foreign income?
Worldwide income and capital gains would be subject to UK income tax and CGT
No longer entitled to use remittance basis
Residency status using sufficient ties?
Previously resident
16-45 days 4+ ties = R
46-90 days 3+ ties = R
91-120 days 2+ ties = R
121-182 days 1 + ties =R
Not previously resident
16-45 days auto NR
46-90 days 4 + ties = R
91-120 days 3 +ties = R
121-182 days 2+ ties = R
