Residency, Domicile, UK Tax Compliance and other taxes

Question 1

When is sufficient UK ties test used?

Answer 1

Individual does not meet any of the automatic tests
* automatically non resident
*automatically UK resident
Then sufficient UK ties test is used

Question 2

Automatically overseas test (automatically not UK resident)

Answer 2

In UK for fewer than 16 days in current tax year
Not UK resident in any of the preceding 3 tax years and fewer than 46 days in current tax year
Working overseas full time, spending fewer than 91 days in the current tax year, of which fewer than 31 were spent working in the UK for 3 hours or more in the current tax year.

Question 3

Automatic UK tests (automatically UK resident)

Answer 3

Spend 183 days or more during the current tax year in UK
Have a home in the UK for at least 91 days during the current tax year & live there for at least 30 days during the current tax year.
If you have overseas home during that 91 day period, you must be present there for fewer than 30 days in the current tax year
Someone who works full time in the UK

Question 4

What is split year treatment

Answer 4

Where a person leaves UK for full time work overseas (and ceases to have a UK home) or comes to the UK for full time work or meets the only UK home test.

Can also apply to a spouse partner who joins an individual who has left the UK for full time work overseas.

Question 5

What are tax liabilities for a non domiciled individual

Answer 5

UK resident non-domiciles have two options
- the Arising basis (i.e. pay tax on all income and gains as it arises)
- the Remittance basis

Remittance
- Where overseas income is £2000 or more
- only income physically brought into the UK will be taxable in the UK
- but individual will lose any personal allowance/ CGT annual exemption amount
- Remittance basis charge will only apply once she has been resident for :
7 of the last 9 years = £30,000
12 of last 14 years = £60,000
- this is on top of Income Tax / CGT due

• If becomes UK Domicile, worldwide income and capital gains will be subject to UK income Tax & CGT
• No longer be entitled to use remittance basis to be exempt from UK taxes on foreign income

Question 6

When is the remittance basis charged

Answer 6

£30,000 when individual is resident in 7 of last 9 tax years

£60,000 when individual is resident in 12 out of last 14 tax years

If less the individual can claim without having to pay the tax charge

Question 7

When is an individual deemed domiciled in the UK

Answer 7

If they have been living in the UK for 15 of the last 20 tax years

Question 8

Split year treatment when leaving the UK

Answer 8

Someone keeping their UK home is not eligible for split year treatment