Domicile status is an important notion for anyone receiving income and capital gains from outside the UK..

It is a concept defined by general law rather than tax law for either Income Tax or Capital Gains Tax. There are three types of domicile relevant to Income Tax and Capital Gains tax – domicile of origin, the domicile of choice, and domicile of dependence.

There are a number of criteria related to attaining domicile status:

  • any individual gaining income or capital gains from outside the UK must have domicile,
  • they may only have one domicile at a time,
  • they are domiciled in the country where they reside permanently,
  • the existing domicile will continue until a new one is acquired,
  • a domicile is a separate status from nationally and residence, though both can influence the domicile,
  • being registered as a voter in an overseas territory usually has no impact on one’s being domiciled in the UK.

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In the last few years tax rules concerning individuals that are non-domiciled in the UK have undergone a significant change. Before the change, any UK resident that was not domiciled (non-dom) or not ordinarily resident in the UK was taxed on a remittance basis for income and capital gains from outside the UK. Instead, they were taxed on income and capital games that were remitted into the UK in the tax year only. However, individuals who had thus far paid very little or even no UK tax had to adhere to new rules that had a great impact on their liability to UK tax. The definition of UK residency has also changed, making it much tighter, resulting in more strict criteria in order to be considered a UK resident.

The concept of domicile status is intricate and complex, with multiple factors such as residency rules, remittance, foreign income, taxation agreements, and many more playing a large part of what may make this complicated for non-domiciled individuals. Britannia Accountancy Services can help you manage all of them. We offer free initial consultation for all clients, so call us now and find out just how much help we can provide.

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