Residentancy Flashcards
Automatically treated as a non resident.
If they are in the UK for less than 16 days in the tax year. Leaver
If they are in the UK for less than 46 days in the current tax year and a non resident for the last 3 years. Arriver
If she works full time overseas at least for 35 hours a week provided she is in the uk for less than 91 days in the tax year and spends less than 31 days in the tax year working in the UK.
A working day is defined as any day where more than three hours of work are carried out.
Sufficient Uk Ties test?
If an individual does not meet any of the automatic test then residence status is determined by 5 Uk ties.
Having a spouse/or minor child (under 18) resident in the uk.
Having accommodation in the uk that is used.
Doing work in the uk (more than 40+ days)
Spending more than 90 days in the UK during either of the previous 2 tax years.
Spending more time in the uk than in any other single country.
Automatically resident in the UK
In the Uk for 183 days or more in the tax year.
Home in the uk for at least 91 consecutive days, of which at least 30 days are within the tax year.
Carries out full time work in the UK (365 days)
Domicile
the country that an individual regards as their natural/permanent home.
Domicile of origin - At birth a person gets a domicile, normally takes his fathers domicile.
Domicile of choice - new domicile by moving to a new country (intention to permanently remain0.
Individual who is not domiciled in the uk but Deemed Domicile?
Resident in the UK for 15 out of the 20 tax years (applying from the 16th year).
Subject to the same tax as a Uk resident.
If deemed dom then income and CGT will remainf or a further 6 years after they leave the UK.
For IHT purposes - UK deemed domicile status is lost once an individual has been non resident for at least 4 consecutive years.
UK dom and Uk Resident taxation?
Income tax- worldwide earned/investment income (whether it is brought into the UK or not)
CGT - chargeable on any gains made any where in the world.
IHT - Chargeable on worldwide assets.
Uk Dom but not Resident in the UK
Income tax - No Uk liability on employment income for duties performed outside of the UK. However earnings inside the Uk still taxable.
UK state pension and other UK pension income are still taxable.
CGT - not ususally liable (unless temp non resident)
An individual who leaves the UK must be a resident outside of the UK for more than 5 years for disposal of assets bought before leaving the uk to be CGT free. (Excludes property).
For property - Rebasing - Since 06/04/2015 - non residents have been able to sell property and only be charged for gains post 6th April 2015.
IHT remains chargable on gifts or assets anywhere in the world. Welsh flag on coffin.
Non Dom (remittance basis)
Income remitted to the UK - 1. Money or property brought into received in or used in the UK for the benefit of the relevant person. 2. Money or property arising from outside the UK.
However an outright and unconditional gift to another person who then brings the money into the UK is not a remittance.
Domicile of choice
Physically residing there,
Any expressed intention to stay there.
Buying a house there and disposing of all property in the country of origin.
Establishing a business or getting a job there.
Involvement in the local community and voting there.
Acquiring citizenship or nationality there.
Making a locally valid will and burial arrangements there
Having one family, friends and business interests.
Breaking or minimising domestic, social and business ties.
Remittance annual tax charge
Annual tax charge is £30,000 for individuals who have been resident in the UK for at least seven out of the previous nice tax years.
£60,000 for individuals who have been resident in the UK for at least 12 out of 14 tax years.
These charges are the tax charges on the UNREMITTED foreign income and gains that are left outside of the UK and is in addition of any tax that is paid on remitted income and gains. However this does not apply to unremitted income/gains if this is less than £2,000 for the tax year.
Annual remittance can be avoided by not claiming on the remittance basis and therefore will pay tax on worldwide income and gains for that year. But will benefit from PA and CGT allowance.
Charge is paid via self assessment.
No Dom but UK resident
Income tax on remittance basis- Tax payable on Investment income outside of the Uk. Employment income where the employment is with a foreign employer and duties are performed whole abroad.
Pensions arising abroad.
Income from self employment carried on wholly outside of the UK
CGT - Remittance basis given automatically for unremitted income or gains are less than £2,000.
Otherwise 30k or 60k.
Where remittance basis is not used all worldwide gains are liable for CGT
IHT - Only chargeable only on transfers of property situation in the UK.
