Residence And Domicile Flashcards
What is Residence and what are the rules
Given status in a given tax year
Definitely not residence
-present in UK for less than 16 days
-present in UK for less then 46 days if not been resident in last 3 yrs
-wirking full-time overseas and present in UK for less then 91 days
Definitely are resident
-present in UK for 183 days
-have home in UK
Have full time work in UK
Might be resident - 5 ties
-spouse, civil partner or minor child present in UK
-made use if accomodation in UK
-doing substantial work in UK - 40 days or more
-spending More than 90 in UK in either 2 tax years
-spending more more time in UK then any other country.
16-45 days 4 or more ties if pervious resident. Not resident if previously not resident
46-90 3 or more ties if previous resident. If not previous resident then 4 ties
91 to 120 2 or more ties if previous resident, 3 or more if not previous resident
120+ 1 tie if previous, 2 or more if not
Residence - splitting a year
Where leave UK for full-time work abroad be resident until leave
Someone who comes UK for full time work be resident when arrive
Leaves UK to live aboard and sells house be resident until leave
What is domicile and what are the rules
Domicile means the country you regard as home
Can only have one domicile
In England domicile is set at birth and is normally the father’s domicile until 16 where can be changed
A domicile of choice may be adopted by moving to a new country with intention of permanently leaving uk- evidence if this may inc moving to another country, selling house/buying new one, setting business up in a new country, family in another country, buried in another country.
Deemed domicile
Where spend significant time in UK but not actually domicile, authorities less keen in this so bought in deemed dom which means effectively are domicile
Includes IHT, it and cgt
Deemed domicile criteria:
In UK for 15 of 20 previous tax years
If want to lose deemed domicile status would need to leave for 5 years
For cgt and it this means world wide assets now taxed to UK
UK resident and domiciled
It - liable to IT on worldwide income
CGT - liable to CGT on worldwide realised gains
IHT - liable to IHT on worldwide assets
UK domicile but not resident
IT - will not be due on pay for work which takes place outside the UK
CGT - if non resident (for 5 years) no cgt will be due on disposal other than in residential properties
IHT - liable to UK IHT on worldwide assets
UK resident but not domicile
For someone who is resident but not domicile, it is possible to apply for ‘remmitance basis’ taxation status
Means only UK income and capital gains tax will apply, where left outside UK no tax will apply
Because of this there is a annual charge where government stop abuse to system
Annual charge
30,000 where resident for 7 of last 9 years
60,000 where resident in UK for last 12 of 14 years
Non resident and non domicile
Income tax - only due on UK investment income
CGT- only on UK residencial property
IHT- due on UK based assets
Responsibility for assessing residence and domicile
UK operates a system of self assessment, each tax payer to make decision regarding residence and domicile
