Domicile and residence for tax purposes is an extremely complex area of tax legislation which can often change as cases are decided in the courts. Generally, if an individual is resident and domiciled for tax purposes in the UK, they will be liable to income tax on their worldwide income. Special rules apply, however, if foreign income or capital gains arising on foreign assets is received by an individual who is resident in the UK but is not domiciled in the UK.
Similarly, a different set of rules apply to non UK domiciled individuals for inheritance tax (IHT) purposes. It is also possible to be deemed to be UK domiciled for IHT purposes although you may be non UK domiciled for other taxes.
Are you aware that individuals who are non UK domiciled will be chargeable to IHT on their UK assets only? Assets remaining offshore will not usually be subject to UK IHT. This is a popular planning point for mitigating an individual’s exposure to UK IHT.
As this area of taxation can produce unexpected outcomes advice should always be taken from a specialist. If you would like some advice on this subject, please get in touch with one of our experts who will be happy to discuss your circumstances with you.
Latest thinking on Domicile
The tax treatment of non-UK Domiciled individuals has been subject to a great deal of press comment recently, with rumours of a complete review of the regime ongoing. More details on domicile review can be found here
Similarly, the question of whether or not you are a UK resident can also be particularly complicated. The latest thinking on the subject of residency can be found here.
Contact us
As the UK member firm of Grant Thornton International, we have access to their global network of member firms. This enables us to deliver sophisticated advice and tailored solutions, taking into consideration your residence and domicile status, to meet the tax and financial planning needs of internationally mobile private clients.
For further information on international tax planning, please click here or contact us on clientsfirst@uk.gt.com.