For those coming to the UK or planning to leave it is essential to be properly advised on the criteria that determine UK tax residence and the timing aspects and implications of this, particularly in the year of arrival and departure.

"We have extensive experience"

We have extensive experience of these subject areas and the approach of the UK tax authority to any claims to non-residence and non-domicile.

Residence

Very broadly, UK tax residence will be automatic if someone spends more than 183 nights in the UK in a single tax year and can occur over a period of time if on average they spend more than 91 nights a year in the UK on average on a rolling period of up to 4 years.

Changing residence may appear a straightforward proposition but it is essential to plan. Any departure must be shown to be permanent or indefinite; any pointers that this may not be the case, such as retaining accommodation available to use in the UK, will be regarded as an invitation for HMRC to challenge the non-resident status.

Leaving the UK to take up a full time job overseas will result in the non-resident status being accepted more readily but it is essential that the contract of employment spans at least a complete UK tax year. There are also particular rules for the taxation of income and gains that occur in the same year that someone leaves the UK that must be considered.

A consultation document was issued on date proposing that a new statutory residency test be put in place with effect from 6 April 2012. Please click here for more information.

Domicile

"as an invitation for HMRC to challenge"

Domicile is different to residence and refers to an individual’s “homeland”. It is taken typically from the birthplace of your father and is known as a domicile of origin. There are significant opportunities for an individual who is resident but not domiciled in the UK to limit the tax paid in the UK on their worldwide income by electing in a particular year to be taxed on what is called the remittance basis. Such a decision needs careful consideration to decide whether the costs involved in claiming the remittance basis justify the tax savings.

HMRC no longer gives rulings on domicile so it is important to understand whether an individual can make a realistic claim to be non-domiciled and the factors about the pattern of life that will be most relevant in the event of any query of domicile status by HMRC.

For users of the remittance basis of taxation, overseas income and gains remitted to the UK to invest in business ventures can, in the future, be made without triggering tax liabilities. For further information on this please click here.

Our Service

If you are considering leaving the UK for tax planning purposes, spending more time in the UK or you would like to understand more about the benefits of being non-domiciled please contact us to arrange a meeting.

For details of our other Tax Advisory services please click here