Tax advisory services for those individuals coming to the UK.
In the UK, a strong distinction is made between tax residence and an individual’s domicile status.
A Statutory Residence Test was introduced to determine UK tax residence status from April 2013 onwards.
The Statutory Residence Test has three parts:
Part A – Factors that will conclusively determine when someone is not resident for UK tax purposes.
Part B – Factors that will conclusively determine when someone is resident for UK tax purposes.
Part C – This will apply only to those with more complex affairs who cannot conclusively determine their status under Part A and Part B, using various connections with the UK to measure the position. These connections, known as “UK ties”, are then referenced against the amount of time spent in the UK to determine whether UK tax residence exists.
Your domicile status has an impact on your UK tax status as it could enable you to file your UK tax returns on the “remittance basis” if you are UK tax resident. This could be to your advantage but you need to carry out detailed planning and preparation to ensure the correct steps are followed.
Your place of domicile is in broad terms your “homeland” i.e. where you have your long-term permanent home. It is the country (or federal state) with which you have the closest personal, family, social and economic ties, and the country in which you have realistic plans to settle permanently in the future, e.g. on retirement.
Your domicile of origin will have been acquired at birth and will normally be your father’s domicile at that time. It is difficult to change a domicile of origin but this is possible if you acquired a new domicile of dependency as a child or a domicile of choice in later life.
For Inheritance Tax purposes only there are additional tests whereby you can be “deemed” to be domiciled in the UK, even if under the above criteria you are considered to be domiciled outside the UK.
Under new rules to be introduced in April 2017, anyone who is UK tax resident for more than 15 years out of the past 20 will also become deemed domiciled for other UK tax purposes, for example for income tax and capital gains tax purposes.
Tax Services for those Coming to the UK
We can help you with the following areas:
- Registering for UK “Self Assessment” Tax Return filing.
- “Overseas Work Day” relief claims for temporary residents including advice on how to record overseas business travel and remittance rules.
- Determining whether non-domiciled individuals should file UK Tax Returns on the “Arising Basis” or the “Remittance Basis”.
- Foreign Tax Credit Claims.
- Establishing treaty tax residence and preparing treaty exemption/credit claims.
- Preparation of annual UK Tax Returns and filing these on-line with HMRC.
- Determining whether UK National Insurance payments are due and obtaining social security certificates of exemption.
- Determining tax treatment of non-UK pension scheme participation.
- More bespoke offshore pension advice.
Tax Residence and Domicile Guide
Please click here to download our Tax Residence and Domicile Guide which takes you through all the issues you need to understand in more detail.
Tax Tips for Expats Coming to the UK
Read our Top 10 Tax Tips for Expats moving to the UK via this link.