Topic 1 Domicile & Residence Flashcards
Residence is definitely as what?
Where a person is living for tax purposes in a particular year
Domicile is defined as what?
The country someone calls home
Which tax would would a domicile of the UK normally pay?
- Income tax
- Capital Gains Tax (CGT) (on worldwide income)
Which tax would a domicile of the UK normally be liable to?
Inheritance Tax (IHT)
The Statutory Residence Test (SRT) determines what?
Whether a person is residence for tax purposes
Which Residence test is this?
- Spend less than 16 days in the UK in that tax year
Non UK resident for in any of the previous 3 tax years & spent less than. 46 days in the current tax year - Work overseas spent less than 91 days in the UK in the current tax year with less than 31 working
- Spent less than 46 days in the UK in the current tax year & non residence in the last 2 years
Automatic Overseas Test
Which Residence test is this?
- Have a home in the UK for 90 days (30 days in current tax year)
- Live in the UK for 365 days + in current tax year
Automatic UK Tests
What percentage of the days must a person do more than 3 hours work to qualify as a UK resident?
75%
Which Residence test is this?
- Family tie
- Accommodation tie
- Work tie
- 90 day tie
- Country tie
Sufficient ties test
Which Sufficient ties test tie is this?
- Spouse or Civil partner
- Co-habiting partner
- Minor child
Family tie
Which Sufficient ties test tie is this?
- Individual has UK accommodation available to them for a period of at least 91 days
Accommodation tie
Which Sufficient ties test tie is this?
Individual works in the UK for more than 3 hours a day for at least 40 days in the tax year
Work tie
Which Sufficient ties test tie is this?
Individual has spent more than 90 days in the UK for either or both of the two previous tax years
90 day tie
Which Sufficient ties test tie is this?
UK is where the invidual has spent the greatest number of days in the tax year
Country test
If resident in 1 or more of 3 of the previous tax years how many ties would a person who has spent 16-45 days of the current tax year would they need?
4 or more
If resident in 1 or more of 3 of the previous tax years how many ties would a person who has spent 45-90 days of the current tax year would they need?
3 or more
If resident in 1 or more of 3 of the previous tax years how many ties would a person who has spent 91-120 days of the current tax year would they need?
2 or more
If resident in 1 or more of 3 of the previous tax years how many ties would a person who has spent 121-182 days of the current tax year would they need?
2 or more
If resident in the UK for none of the previous tax years how many ties would a person who has spent 46-90 days of the current tax year would they need?
4
If resident in the UK for none of the previous tax years how many ties would a person who has spent 91-120 days of the current tax year would they need?
3 or more
If resident in the UK for none of the previous tax years how many ties would a person who has spent 121-182 days of the current tax year would they need?
2 or more
What is the “Domicile of Origin”?
Domicile acquired at birth (father domicile at birth of parents married. Mother’s if not)
At what age can a person change their domicile?
16
What is the “Domicile of choice”?
When an adult shoes intention to make somewhere else home
Do UK residences need to pay tax on all income & unearned worldwide?
Yes
Individuals who become non residents usually have no liability for income tax on overseas employed income.
True or False
True
Individuals who become non residents usually have no liability for income tax on UK savings and investments
True or False
True
For a non-resident to be free of CGT how many year would they need to be a non-resident?
5 years
What is “Remittance basis” in relation to income tax?
Where someone who is a UK resident but Domiciled elsewhere elects to pay tax on income and gains from outside the UK when they arise
How does “Remittance basis” tax work?
Where a person has overseas Income or gain in a tax year where they are residents in the UK
The annual tax charge to use the remittance basis for a person who has been resident in the UK for 7 out of the last tax 9 years is how much?
£30,000
The annual tax charge to use the remittance basis for a person who has been resident in the UK for 12 out of the last 14 tax years is how much?
£60,000
If a person does not use the “Remittance Basis” will they be subject to CGT on all worldwide assets?
Yes
If a person is not UK Domiciled but lives in the UK what does this mean for IHT purposes?
They will only pay IHT on UK residential property
Under what circumstances could someone be present in the UK at midnight and this not count towards there UK residency?
- Airline passenger (in transit)
- Medical circumstances
Does someone who is a UK resident but Domiciled elsewhere who uses the “Remittance Basis” still pay UK tax?
Yes
From the 16th tax year of being a UK resident what happens to the their Non-UK Domicile status?
They are deemed UK Domicile for tax purposes
