Robert Newey & Co

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International taxation of income and assets (including inheritance tax)

When an individual plans to move to the UK or to leave the UK, it one must usually first  consider his or her residence status for UK tax purposes.  The UK has two relevant concepts of residence: these are residence itself and ordinary residence.  Ordinary residence is broadly equivalent to habitual residence.  Strictly, residence and ordinary residence are decided on the basis of complete tax years (6th April to 5th April).  There are, however, situations where Her Majesty's Revenue & Customs will split the tax year. One such situation is where an employee goes to work abroad for an extended period.

The UK also has a concept of domicile.  Very briefly, an individual acquires a domicile of origin at birth. A person’s domicile of origin can be replaced with a domicile of choice if he or she moves to a country and intends to remain there permanently or indefinitely.  In certain circumstances a domicile of choice may be abandoned.  If a domicile of choice is lost and is not replaced with another domicile of choice, the domicile of origin revives. (There is also a concept of domicile of dependency, which is not discussed here.)

The UK has special tax rules for individuals who are not domiciled in the UK (non-domiciled persons).  Under these rules it may be possible for a non-domiciled person who is resident in the UK to avoid or defer UK tax on certain income and gains and to avoid inheritance tax on assets situated outside the UK. Domicile is also important for certain non-tax purposes.

Tax planning for non-domiciled people coming to the UK frequently involves the use of offshore trusts.

Examples of how we can help

  • Analyse situations and advise on the law and official practice;
  • Make recommendations in the light of the client’s specific circumstances;
  • Liaise with HM Revenue & Customs, advisers in other countries and others as required.
  • Draft documents;
  • Call on overseas tax specialists (with whom we have long-standing links) to assist if required.

Please contact us to find out more about our services and discuss your situation in more detail.

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