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TAXguide 04/18: Residence and domicile

In TAXguide 04/18 Lisa Spearman provides an introduction to the taxation issues which may be in point when considering the non UK aspects of a client’s affairs. Read a summary here, Tax Faculty members can download the full guide.


TAXguide 04/18

Tax Faculty members can download this guidance in full.

There are a number of changes to domicile which take effect from April 2017 affecting the tax returns for the year ended 5 April 2018.  At the time of writing it is uncertain how the new legislation is to be implemented and guidance has only recently been issued by HMRC. You should ensure that you have referred to the latest guidance available as it may change some of the contents here.

In any event, this is an area where specialist knowledge may well be required (see Mehjoo v Barker [2013] EWHC 1500 (QB)). This guide aims to provide an overview and summary of the most commonly encountered points. It is not comprehensive and should be read with this clearly in mind. In particular we do not cover Transfer of Assets Abroad legislation, Annual Taxation of Enveloped Dwellings, capital gains tax (CGT) for non-residents on residential property or matters relating to employment-related securities.

Nor do we address the changes to the IHT treatment of UK residential property for non-domiciliaries, which came into effect from 6 April 2017. Finally, space does not permit any discussion of the taxation of offshore trusts and companies. It is very often the case that non domiciled people have interests in such entities and readers should be certain they are up to date on the taxation rules relating to this matter - further changes have been introduced from 6 April 2017 and 6 April 2018.

If you are required to advise a client outside of your experience, we recommend that you consider enlisting specialist help, for example from TAXconnect.

Full guide:

The full 30-page guide covers:

   Section  Covers
 1   Introduction  
 2  Key definitions  
 3  The statutory residence test  Automatic overseas tests
 Automatic UK tests
 Sufficient ties test
 4  Domicile  Domicile of origin
 Domicile of dependency
 Domicile of choice
 Formerly domicile residents
 Deemed domicile
 5  The remittance basis  The claim
 The charge
 Automatic exemption
 6  Types of remittance  
 7  Calculating and tracing the amount remitted  
 8  Transitional reliefs  Cleansing  :Rebasing
 9  Overseas workday relief  Special mixed funding rules
10  Consequential issues of using the remittance basis  Account segregation
 Miscellaneous rules
 Bringing an asset to the UK
 Source ceasing
 Temporary non-residents
11  Business investment relief
 Obtaining a benefit
 Potential tax charges
12  Capital losses
13  Record-keeping and compliance