20th December 2013 by Simon Misiewicz
Are you earning money whilst you are living abroad?
Are you earning money from overseas?
The subject of UK and international tax is complex to say the least. As you would expect from having multiple countries tax you at the same time in some instances.
As such we have written a number of articles to help you along.
Part 1: Paying tax in the UK depends on where you live
Part 2: Rental income from property
Part 3: Capital Gains Tax (CGT), UK and international tax
Part 4: Domicile & leaving the UK
Part 5: Double Taxation Agreements (DTA) & IHT
Without further delay let us help you with the complex subject of UK and international tax.
Part 4: Domicile & leaving the UK
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 (3).
Questions of domicile can be complex but broadly speaking you have your domicile in the country that is your ‘real’ or permanent home, which, if you have left, you intend to return to (4).
Leaving the UK
Leaving the UK ‘permanently’ means that you are leaving the country to live abroad and will not return here to live. Leaving ‘indefinitely’ means that you are leaving to live abroad for a long time (at least three years) but you think that you might eventually return to live here, although you do not currently have plans to do so.
The act of leaving the UK does not necessarily make you not resident and not ordinarily resident. You must also make a definite break from the UK and any remaining ties you have with the UK must be consistent with not being resident here. If you say that you are no longer resident and ordinarily resident in the UK, HMRC might ask you to give some evidence to show that you have left the UK permanently or indefinitely and that there has been a clear change in the pattern of your life. For example, we would expect you to show that when you left the UK you had acquired accommodation abroad to live in as a permanent home. If you still have property in the UK which you can use after you leave, HMRC might want you to explain how retaining that property is consistent with leaving the UK.
You will not cease to be resident in the UK simply because you become resident elsewhere. You can become resident in another country and remain resident in the UK.
If you are leaving the UK permanently or indefinitely you will become not resident and not ordinarily resident from the day after the day of your departure (3).
If you are looking for an accountant or thinking of changing your current accountant because they do not understand property investing then please contact Selina on firstname.lastname@example.org to book in your free “Property Finance & Tax Mastery” free one to one consultancy slot.
If you would like further information on property finance and taxation matters then please visit our website www.optimiseaccountants.co.uk, visit us on Facebook https://www.facebook.com/OptimiseAccountants and Twitter https://twitter.com/Simon_Optimise