Overseas aspects of IT and CGT Flashcards
A person acquires domicile at
Birth - usually domicile of their father (or mother if father died before born or unmarried at birth)
A person retains their acquired domicile. until they acquire
Different domicile of dependency (under 16 and person whom legally dependent on changes domicile)
Different domicile of choice (16+)
Person can be deemed domicile if either of the conditions are met:
- Resident in UK for at least 15 of past 20 tax years, but not if not UK resident in that tax year or any tax year from 2017/18 onwards or
- boring in UK, domicile of origin in UK and UK resident in tax year
UK resident worldwide income
Liable to UK income tax on worldwide income
UK non-res worldwide income
Only liable to UK income tax on income arising in the UK
Arising basis definition
income and gains are taxed as they raised regardless of where the income/gains are held
UK R&D - overseas income taxable on
arising basis
UK R and ND - overseas income taxable on
Remittance basis may apply (charge 30k-60k)
UK non res - overseas income taxable on
not taxable
If working abroad temporarily for UK employer in EU, UK NIC are
applicable for the first 12 months
If employer bears cost of board and lodging abroad this is
a tax free benefit
If employed abroad, employee may return home any number of times at the expenses of the employer, these costs
are not taxed s benefits
For absences of 60 days +, travelling expenses for spouse and minor child are
tax free if paid/reimbursed by employer - up to 2 return visits
When does remittance basis automatically apply
- ND with unremitted income and gains <2k
- ND, no UK income/gain/Uk inv income < £100, no income remitted, UK res not more than 6/9 previous tax years/under 18
If claim remittance basis
- lose entitlement to PA and CGT AEA
may have to pay RBC 30k if resident 7/9 tax years and 60k if 12/14 tax years
must make claim within 4 years after end of relevant tax year
Claiming the remittance basis
- normally made on self assessment form
- < 18years old no RBC
- RBC in addition to tax due on remitted income and gains
- if do not claim remittance, taxed on arising basis with full entitlement to UK PA and AEA
- consider year by year
Who can claim PA
Citizens of EEA
Yes
Who can claim PA
Resident in Isle of Man/channel islands
Yes
Who can claim PA
Current/former crown servants and widow/ers
Yes
Who can claim PA
Residence in territories with double tax agreement
Yes
Who can claim PA
Former residents who left UK for health reasons
Yes
Steps to DTR
- Calculate UK income tax including all soruces
- Exclude overseas suffering highest rate of overseas tax, treat this source as top slice
- Recalc UK income tax
- exclude net source of overseas
- repeat three, exclude both sources, difference is UK tax on second sourec
DTR is
lower of actual overseas tax and UK tax on overseas income
UK gains and losses for UK R&D
Arising basis
UK Gains and losses for UK RND
arising basis
UK Gains for non UKR
not usually taxable in UK (6/4/19 on disposal land)
Overseas gains and losses for UK R&D
Airing basis
Overseas gains and losses for UKR, ND
Remittance basis limited relief for losses
Overseas gains and losses UK NR
Not taxable in UK
From 6/4/19 NR are subject to CG on
disposals of UK property (assets deriving 75% value UK land)
