Residency & Domicile
For international clients or clients considering emigrating abroad an understanding of residency and domicile is vital for effective tax planning.
The residency rules are complex and require the application of three detailed tests:
- the automatic residency test;
- the automatic overseas test; and
- the sufficient ties test
The concept of domicile is very different to residency. You could easily reside for ten years in Britain and yet not become domiciled here. There are three types of domicile:
- domicile of origin;
- domicile of dependency; and
- domicile of choice
Your domicile status can have a significant impact on your estate's inheritance tax liability. We can advise you on the law relating to changing or retaining your domicile of choice and the statutory rules relating to deemed domicile for inheritance tax.
If you are resident but non-domiciled in the UK, then if you have foreign income or gains in excess of £2,000 you will generally either have to pay UK tax on your worldwide income and gains (subject to double-taxation relief) or claim the remittance basis. Warners can advise you on whether it is tax efficient for you to claim the remittance basis.
Warners can assist with tax planning that takes into account your residency and domicile. Warners have the expertise to advise on how to safeguard your worldwide assets from unforeseen tax liabilities.
- How to Reduce your Inheritance Tax Bill A combination of rising house prices and a freeze on the threshold at which estates pay inheritance tax means that many more households fall into the tax net than was once the case. Ruth Pannell, wills solicitor at Warners in Sevenoaks, advises how, with some simple planning, it is possible to keep your inheritance tax liability to a minimum...