Most countries tax you differently depending on whether or not you’re considered ‘tax resident’.

Tax residence is a different concept to actual residence. This means that you might legally be tax resident somewhere even if you don’t consider it to be your home.

Tax residence is usually based on:

• How long you’re in the country
• Where your family live
• Where you work
• If you own a home in the country
• How much money and assets you own in the country
• Where the centre of your life is.

The different tax laws in different countries can sometimes conflict, which could mean that you’re tax resident in multiple countries or that you pay tax on the same income twice.

It’s important to plan your tax residence correctly to avoid situations like these – contact us today to find out how we can help.

Under English law, your domicile is the country or state of your permanent home which may be different to the place where you currently live. It can have an impact on the UK income tax, capital gains tax, and inheritance tax that you pay.

You are automatically given your parents’ domicile when you are born. This is known as your domicile of origin.

You keep your domicile of origin until you get a new one. Even if you move abroad, your domicile probably won’t change unless you specifically change it.

You need to meet certain criteria if you want to change your domicile. As a minimum, under English law you’ll have to:

• Move to another country
• Prove that you plan to live there permanently.

The UK has a special rate for long term UK residents who are not domiciled in the UK. Once they’ve been a UK tax-resident for 15 out of the previous 20 UK tax years they are treated as domiciled in the UK (‘deemed domicile’).

Your tax residence for a certain tax year depends on how long you spend in the UK during that year.

You’re automatically UK tax resident if:

• You spent 183 or more days in the UK during the tax year
• Your only home was in the UK and you spent at least 30 days there during the tax year.

You’re automatically non-resident if:

• You spent fewer than 16 days in the UK during the tax year but have been UK resident for the previous three tax years
• You spent fewer than 46 days in the UK during the tax year and haven’t been UK resident for the previous three tax years
• You work full-time abroad and spent fewer than 91 days in the UK (with a maximum of 30 days working in the UK).

If you’d like more advice on working out your tax residency, contact us online today.

Your tax residence for a certain tax year could change if:

• You spend more or less time in the UK
• You buy or sell a home in the UK
• You start or finish working abroad
• You get married, separated, or have children in the UK
• Your family moves in or out of the UK.

If you are in any one of these situations or expect to be, we can advise on what the impact will be for your tax residency. We can also help you manage these life changes in a tax-efficient manner.

Call us on 0370 1500 100 to find out more.

Everyone has to pay UK tax on UK income but your tax residence and domicile determines how much UK tax you pay on foreign income and capital gains.

UK tax residents who are UK domiciled pay UK tax on foreign income and capital gains.

Non-domiciled UK tax residents don’t pay UK tax on foreign income or capital gains if:

• They’re less than £2,000 in the tax year
• They chose to pay tax on a remittance basis - this when you’re taxed only on your UK income and gains. Foreign income and gains you keep out of the country won’t be taxed
• Certain tax reliefs or allowances apply to them.

Non-UK residents don’t pay UK tax on any foreign income. They only pay capital gains tax:

• On UK residential property
• In some cases if they have previously had UK tax residence and become UK tax resident again after a limited time.