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2020-09-20 - notes on UK taxation



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2.1 UK residence – tax liability

When you are resident in the UK you are normally taxed on the arising basis of taxation, meaning you will pay UK tax on:

  • your income which arises in the UK
  • your income which arises outside the UK
  • gains which accrue on the disposal of your assets anywhere in the world.

But, if you are resident in the UK and you are:

  • not domiciled in the UK and/or
  • not ordinarily resident in the UK

there are special rules which might apply to your foreign income and gains. These allow you to pay UK tax only on the amount of your foreign income and gains that you, or another relevant person, brings (or remits) to the UK.

Even if these special rules do apply to you, you will still have to pay UK tax on any of your income and gains which arise/accrue in the UK. This method of dealing with your foreign income and/or gains is called the remittance basis.

4.2 What does domicile mean?

Domicile is a matter of general law; not of tax law. There are many things which affect your domicile. Some of the main points that you should consider if you are claiming not to be domiciled in the UK are shown below:

  • You cannot be without a domicile.
  • You can only have one domicile at a time.
  • You are normally domiciled in the country where you have your permanent home.
  • Your existing domicile will continue until you acquire a new one.
  • Domicile is distinct from nationality and residence, although both can have an impact on your domicile.
  • The fact that you register and vote as an overseas elector is not normally taken into account when deciding whether or not you are domiciled in the UK.

Any references we make to being domiciled in the UK are references to being domiciled in any part of the UK.