Tax Residency & Domicile - The key implications that non-specialists should understand

Statutory Residence Test

• Automatic overseas residence
• Automatic UK residence
• ‘Sufficient ties’ tests
• Split-year treatment
• Including case study
• Temporary non-residence

Domicile status

• How it is determined
• Deemed domicile
• Its importance for tax income tax, CGT and inheritance tax (IHT) for tax years prior to 2025/26
  • Remittance basis for income and gains
  • Excluded property for IHT

The new residence-based regime for income tax and CGT

• Abolition of remittance basis
• Who qualifies for tax exemption under the new FIG (‘Foreign income and gains’) regime
• Situs (location) of assets
• Changes to overseas workday relief (OWR) following abolition of remittance basis
• Transitional provisions
  • Temporary repatriation facility
  • Rebasing of assets for CGT purposes

The new residence-based IHT regime

• Definition of long-term resident (LTR), where worldwide assets come within the scope of IHT rather than just UK assets
• LTRs becoming non-resident: the ‘tail’ provisions
• Replacement of spousal domicile elections with spousal LTR elections

Other matters

• Legacy issues for non-doms
  • E.g. where remittance basis has been claimed in years prior to 2025/26
• How all UK residential property now potentially falls within the IHT net
• Finance (No.2) Act 2023 anti-avoidance concerning share exchanges in close companies

Our trainer is a Chartered Accountant who qualified with PwC in 1988, spending his last 18 months there in the Tax department. In 1989 he joined a leading financial training company as a tax tutor. Since 1992, he has been self-employed as a Professional Tutor and Training Consultant, specialising in tax update courses for accountants, lawyers and investment managers.

Our trainer writes regularly for Tax Insider and speaks at conferences of bodies such as the ICAEW and CIOT.

This course will explain to delegates how someone’s residence and domicile status are determined, before explaining the key UK tax implications thereof. It is aimed at non-specialists so will not cover advanced planning, but will explain the key issues for individuals resulting from the Autumn 2024 Finance Bill.

• Redcliffe’s non-UK domicile status course trainer is a Chartered Accountant with over 35 years' experience in tax training
• Key cases will be covered and many practical scenarios will be discussed
• Several short case studies are included
• The major reforms in April 2025 to the taxation of those who are domiciled overseas will be explained

The Autumn 2024 Finance Bill fundamentally changes the tax regime in the UK. The previous advantages of non-domicile status for income tax, CGT and IHT are disappearing, with chargeability to all three taxes being based solely on a taxpayer’s residence status from 6 April 2025.

This course will assume no prior knowledge of the topic. After outlining the way that an individual’s UK residence status is established, we will discuss how the new regime will apply. We will then explain the key transitional rules for those who were previously non-dom and some of the many legacy issues that will remain from the old regime.

Note that only UK tax rules will be discussed, not the tax law in other jurisdictions.