Residence & Domicile Rules

It’s important to consider residency rules when arriving in, or departing the UK.

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Residence Rules

In a global economy many people are choosing to work overseas, whether leaving the UK for employment in another country, or coming from overseas to work in the UK. This can expose individuals to changes in their residency status and can have a tax implication.

Am I a UK or non-UK Tax Resident?

The tax treatment of income can be a complex area and it is advisable to seek specialist advice as the rules regarding residence in and out of the UK can be complex. HMRC’s guidance note RDR3 – statutory residence test, sets out to help define whether an individual is resident or non-resident in the UK. This must be considered in tandem with relevant Double Tax Agreements.

Our experts can guide you through the rules to establish your position and help you plan to keep your tax bills to the minimum.

UK Residents Going Abroad

There are many things to consider when planning such a move, such as:

  • Reviewing contracts of employment/self-employment
  • The changing impact of Income Tax on your earnings and investment income
  • The changing impact of Capital Gains Tax on your assets
  • Planning dates of departure from and re-entry into the UK
  • Calculating allowable days in the UK including working days

If you are leaving the UK to become non-resident our tax specialists can help you make sure everything is organised to minimise tax and to avoid pitfalls and advise on any required paperwork.

Overseas Nationals Coming to the UK

It is no surprise that the UK tax authorities will be interested in your financial affairs.

Areas to consider are:

  • Establishing your UK tax status
  • The taxation of income and capital gains while you are here
  • Whether to use an offshore company to hold UK assets
  • Inheritance tax rules on UK and overseas assets
  • Help with will writing and related tax planning

Our experts are familiar with all these issues and are happy to welcome you and help you plan for a new tax regime.

“This is a notoriously difficult area, especially since the rules are not clearly defined in tax legislation. This makes it all the more important that you consult us before you act”

Domicile Rules

It’s important to note that this is an area that is subject to revision following the Spring Budget 2024 announcements. Please contact our specialist personal tax team for advice on how you may be affected.

The tax rules on domicile are complicated, whether you are a UK resident but also non-UK domiciled, or if you currently have a UK domicile but are looking to change it and become ‘non-UK domiciled’.

In certain circumstances a change of domicile can bring tax benefits. However careful consideration needs to be given to the tax treatment resulting from such a change.

Our specialists have the expertise to be able to guide you through domicile related matters.

Overseas Nationals Coming to the UK

If you are non-UK Domiciled but residing in the UK you need to consider the following areas

  • The ‘Remittance basis of assessment ‘
  • When the ‘Remittance basis’ charges apply and to whom
  • Capital Gains tax on both UK and non UK assets
  • The ‘Worldwide basis of assessment’ and when it can be beneficial
  • When the rules on deemed domiciled for income tax came into effect
  • Inheritance tax planning including the effect of the UK ‘deemed domiciled’ rules for IHT
  • Income tax planning including investment opportunities.

UK Nationals Leaving the UK

If you have a UK Domicile and wish to become non-UK Domiciled you need to consider the following areas:

  • How to persuade the tax authorities that you are ‘non-domiciled,’ even after you have permanently left the UK
  • How to permanently remove yourself from ‘UK domicile’ status
  • Inheritance tax on UK assets and non-UK assets
  • Trusts
  • IHT and estate planning

Our experts can provide advice to help you to mitigate your tax liability; establish domicile status; and avoid potential tax related pitfalls when arriving in, or departing the UK.

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    Residence & Domicile Ruleshttps://www.alliotts.com/expertise/personal-tax/residence-domicile-rules/
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    Delia Orme | Alliotts

    Delia
    Orme

    Consultant

    View Delia's profile

    Delia has been advising private clients and businesses for over 30 years on a wide range of taxation issues. As a Chartered Accountant and Chartered Tax Advisor Delia provides inclusive personal and business tax advice that helps clients plan for the future.

    When advising business owners on their strategy, financial affairs and tax matters Delia treats the business as part of the owner’s overall financial picture. Clients have the reassurance of knowing that their tax planning is in capable hands and that they receive thought out advice that is specific to them; integrating every aspect of their lives.

    Delia provides a wide range of personal tax advisory services to ensure that they pay no more tax than they need to, whilst helping protect and pass on their wealth to the next generation. Trusts are often useful for passing on family wealth whilst staying in control, but they are very complex vehicles from a tax and legal perspective.

    Working with business owners Delia advises on tax strategies and tax compliance matters. By providing a clearer tax and financial plan for the entrepreneur shareholder, Delia guides them in growing their business.

    Delia has many years of experience advising individuals on the personal tax implications of moving to and from the UK, including the tax treatment of non doms and residency status. Where employment can be based in one or more overseas locations and often there are UK assets such as property to consider, Delia advises individuals to help them remain both compliant and tax efficient.

    There are times when clients need to unravel complex arrangements, often when separating business or personal relationships, and these have a tax impact. Delia is experienced in advising on the tax implications and tax calculations surrounding divorce. Her expertise is in thoroughly investigating the financial information available and producing robust reports to withstand scrutiny.

    When working with businesses Delia advises on a wide range of areas including

    • Corporate restructuring
    • EIS and SEIS
    • Research and Development Tax Relief (R&D)
    • Transactions
    • M&A activity
    • IR35
    • Probate

    Typical projects that Delia advises on include:

    • Maximising net spendable incomes for entrepreneurs
    • Property investment and development structures
    • Stamp Duty (SDLT)
    • Passing on family wealth through Will and Inheritance Tax Planning
    • Capital Gains Tax Planning on a variety of assets
    • Tax expert witness
    • Advising clients moving into or out of the UK for business or personal reasons.
    • Tax treatment of non dom and resident status

    Delia’s attention to detail in every assignment; her experience in the practical application of tax rules; and dedication to client care mean that clients have no hesitation referring her to their friends and family as a trusted advisor.

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    Jane
    Thackstone

    Partner

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    Residence & Domicile Rules

    Jane is experienced in tax planning for those coming to or leaving the UK (pre arrival and pre departure planning). In particular navigating the statutory residence test, dual residence issues and double tax treaty interpretation. Jane also advices on domicile issues including the taxation with regards to non-domiciled clients.

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    Gerry Hollingsworth | Alliotts

    Gerry
    Hollingsworth

    Manager, Personal Tax

    View Gerry 's profile

    Gerry is a Chartered Tax Advisor and Fellow of the Association of Taxation Technicians. He has over 30 years of experience in all aspects of private client tax. Gerry works with a wide range of clients, including high net worth individuals in all areas of personal tax including compliance and tax planning.

    Gerry has expertise in the taxation of private businesses and partnerships, all aspects of personal income (including UK and non-UK landlords) and capital gains, and inheritance tax matters.

    In addition, Gerry has a special expertise, coupled with extensive experience, of advising our clients about the implications of tax residency and domicile matters according to individual and personal circumstances in order to enable tax efficient outcomes.

    Gerry is recognised for his ability to build strong relationships with his clients to really understand what is important to them and their families, which enables the best possible support and advice that works for the long term. He takes a proactive approach and provides our clients with clear advice on the complex UK tax rules as they impact their financial transactions.

    Gerry also works with colleagues across the world through connections in our international network, Alliott Global Alliance when there are cross-border issues.