Residence & Domicile

Question 1

What is meant by “Residence”?

Answer 1

Residence is the term used to describe the tax status of an individual in a given tax year.

Question 2

What is meant by “Domicile”?

Answer 2

Domicile is the country which they regard to be their permanent home.

Question 3

How does HMRC determine if someone is a UK Resident?

Answer 3

(1) Three tests meaning a person is automatically non-resident (automatic overseas tests).
(2) Three tests that mean a person is automatically UK resident (automatic UK tests)
(3) If none of the above tests apply, the sufficient ties test is used.

Question 4

What is the Automatic UK test (automatically UK resident)?

Answer 4

You will be automatically UK resident if

Spend 183 or more days in the UK

Only have 1 Home and it is in the UK

Someone who works fulltime in the UK

Question 5

What is the Automatic Overseas Test (automatically non-UK resident)?

Answer 5

You will be automatically NON-UK resident if one is met:

Fewer than 16 days in UK current year

Not UK Resident in any of the 3 preceding years + fewer than 46 days current year

Someone who works fulltime overseas with no significant breaks

Question 6

What is the Sufficient Ties Test (automatically UK resident)?

Answer 6

None of the automatic tests apply?

View if the individual has one of the following:

• Family Tie
• Accommodation Tie
• Work Tie
• 90 day Tie

More Ties = Less days needed to be considered a UK Resident

Question 7

Is CGT charged on overseas disposals?

Answer 7

Yes

Question 8

Is it possible to be resident for tax purposes in more than one country at the same time?

Answer 8

Yes

Question 9

What are the three PARTS of the “Residence Tests”?

Answer 9

Automatic Overseas Test (1)
Automatic UK Test(2)
Sufficient ties Test (3)

Taken in this order if any one applies no need to proceed to the next test

Question 10

What is non-domicile “Arising Basis”?

Answer 10

Taxation is applied ONLY to funds brought into the UK

Quirk - No Personal Allowance or Capital Gains Allowances

Question 11

What is non domiciled “Remittance Basis”

Answer 11

You are considered Arising Basis until year 7 where you are forced to Remittance Basis.

Remittance basis charge will apply once she has been resident for seven of the previous nine tax years = £30,000.

If she is resident for 12 of the previous 14 tax years this increases to £60,000.

15 of the past 20 she is deemed UK Domiciled

Question 12

What is non-domicile “Spousal Exemption”

Answer 12

Equivalent exemption to the current Nil Rate Band (NRB)

RNB = 325,000