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Non-Domicile Status UK:
This guidance replaces the IR20 Residents and non-residents: Liability to tax in the United Kingdom. Any practices associated with the IR20 – whether overtly expressed or not – will not apply from 6 April 2009, unless provided for outside the IR20 (in statute law, in case law, in published extra-statutory concession, or in a guidance note).
This guidance outlines our (HM Revenue & Customs) application and interpretation of legislation and case law. The material is provided for your guidance. It sets out the main factors that are taken into account based on the rulings of the courts. Whether any section of this general guidance is applicable to you depends on your particular facts, as each set of circumstances will be different. It also seeks to give practical examples of what the relevant law means; these are only illustrative examples.
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Any practices described in this guidance are subject to periodic review and may subsequently be altered or withdrawn. If practices were to be changed or revoked this would not normally be done retrospectively.
You do not need to read this guidance if you live in the UK and pay UK tax on your UK income and chargeable gains and you plan to remain in the UK and either:
- have never received foreign income or foreign chargeable gains or
- have had foreign income or chargeable gains in the past and you paid UK tax on the foreign income or gains in the years when these arose/accrued.
Your residence position is one of the factors that determines what UK tax you need to pay on what types of income and gains. If you are resident and ordinarily resident in the UK you will be liable to UK tax on all your income wherever it arises (unless you claim the remittance basis because you are not UK-domiciled). This includes earned income from employment and self-employment, as well as your UK investment income such as dividends or interest from a bank or building society. You will also pay Capital Gains Tax on any gains you have from the disposal of certain assets which belong to you.
Even if you are resident (or ordinarily resident) in another country you may also be resident (or ordinarily resident) in the UK. This is sometimes referred to as dual residence.
The terms of a Double Taxation Agreement might affect your final tax position. If you are at all unsure of your position then this guidance should help by providing a starting place to get the information you need. If you need more help please contact us, or speak to your tax adviser.
The purpose of this guidance
This guidance is designed to help you as an individual. It explains how – when you have connections outside the UK – your particular circumstances will affect what UK tax you need to pay. It applies only to individuals so it does not cover trustees (except in their capacity as individuals), companies, clubs, societies or other types of legal person. Nor does it cover Inheritance Tax.
This guidance does not affect your right of appeal against any HM Revenue & Customs (HMRC) decision.
You are responsible for your own tax affairs in the UK. You should keep supporting documents. We might ask you about your tax affairs at some time.
This guidance will tell you the main factors to take into account when deciding your residence, ordinary residence and domicile status, and the potential consequences for your UK tax position. It is general guidance which is designed to help you reach a decision yourself. Depending on your circumstances this might not be straightforward and our guidance may not cover all of the issues which affect you. If this is the case you might need to contact us for more information or seek the services of a professional tax adviser.
1.1. Self Assessment in the UK and how to appeal
Depending on your circumstances, you may have to complete a Self Assessment tax return. The date for filing a paper return is normally 31 October following the end of the tax year for which you are making the return. If you file your tax return online, the deadline for filing is normally 31 January following the end of the tax year for which you are making the return, and the filing process assists you with the tax calculation process. Not all the Self Assessment pages relevant to this guidance are available in our online system. If you need to fill in one that is not available you will have to use externally supplied software or submit a paper tax return.
After processing, we may select your completed return for further examination.
The Self Assessment system requires you to make a decision on whether or not you are resident in the UK. If you are resident you may also have to decide whether you are not domiciled and/or not ordinarily resident in the UK as this may affect how any foreign income and/or gains that you have are taxed in the UK. If you decide that you are not resident, or not ordinarily resident, or not domiciled in the UK, we may ask you to provide evidence to support this.
Your dealings with us will normally be routine. But there may be times when you disagree with a decision we have made. If this happens, you may be able to challenge the decision by appealing.
In most cases your appeal will be settled by reaching an agreement with us. But if you can’t agree, you can ask for either of the following:
- a review by us, or
- your appeal to be heard by an independent tribunal.
When we write to you with a decision we will also tell you:
- if you have a right to appeal
- how to appeal
- what time limits apply
- where to send your appeal.
You must send your appeal to us in writing, normally within 30 days of the date of the decision you disagree with. You can either use an appeal form (which you may have been sent with the decision letter) or you can appeal by letter.
You can find out how this system works, how to ask for a review, or how to appeal to the tribunal, by looking at factsheet HMRC1 HM Revenue & Customs decisions – What to do if you disagree.
1.2. An introduction to residence
The terms ‘residence’ and ‘ordinary residence’ are not defined in the Taxes Acts. Our guidance on these terms is largely based on rulings of the courts. This guidance tells you the main factors to take into account when deciding your residence and ordinary residence status. Your status is determined by the facts of your particular case. It is not simply a question of the number of days you spend in the country.
If you are resident in the UK you are normally taxed on the ‘arising basis’ (see 12.3). This means that you will pay UK tax on all of your income as it arises and on your gains as they accrue, wherever that income and those gains are in the world. There are some exceptions to this which are covered in this guidance.
It is possible to be resident in the UK, but not ordinarily resident here (see 12.15) and/or not domiciled here (see 12.5). If at least one of these circumstances applies to you, you have a choice of whether to use the arising basis of taxation or the ‘remittance basis’ (see 12.20) of taxation. You can find full details of the remittance basis in part 5 of this guidance.