Residence, Domicile, UK Tax Compliance and Other Taxes Flashcards Preview

AF1 2020/21 > Residence, Domicile, UK Tax Compliance and Other Taxes > Flashcards

Flashcards in Residence, Domicile, UK Tax Compliance and Other Taxes Deck (7)
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Residence and Domicile - Definition and key points:

  • Residence is the term used to describe the tax status of an individual in a given tax year. 
  • Domicile is the country which they regard to be their permanent home.
  • There are three tests that HMRC can carry out on an individual to determine if they are UK resident or not:
    • Three tests meaning a person is automatically non-resident (automatic overseas tests).
    • Three tests that mean a person is automatically UK resident (automatic UK tests)
    • If none of the above tests apply, the sufficient ties test is used. 
  • Any days that an individual is physically present in the UK at midnight counts as a day of presence.


Automatic overseas test (automatically not UK resident) - key points:

  1. Individual in the UK for fewer than 16 days in the current tax year. 
  2. Not UK resident in any of the three preceding tax years and fewer than 46 days in the current tax year. 
  3. Working overseas full-time, spending fewer than 91 days in the UK of which fewer than 31 days were spent working in the UK for 3 hours or more in the current tax year. 


Automatic UK test (automatically UK resident) - key points:

You will be automatically UK resident if:

  • You spend 183 days or more during the current tax-year in the UK. 
  • If you have a home in the UK for at least 91 daysduring the current tax year and live there for at least 30 days during the current tax year. If you have an overseas home in that 91 day period, you must have been present there for few than 30 days in the current tax year. (in this test only it is not necassary to be present a midnight for days to count).
  • Someone who woks full time in the UK


Split year treatment - key points:

  • This applies where a person leaves the UK for full-time work overseas (and ceases to have a UK home) or comes to the UK for full-time work or meets only the UK home test. 
  • It can also apply to spouse/ partner who joins an individual who has left the UK full time to work overseas. 

For example, if you are eligible for split-year treatment and you come to the UK on 1 July 2020, your residence position for the purposes of calculating your income tax liability in 2020/21 will be as follows: you will be treated as not resident for the period from 6 April 2020 to 30 June 2020 and you will be treated as a UK resident for the period from 1 July 2020 to 5 April 2021.


Sufficient UK ties test - key points:

  1. Having a house, civil partner or minor children resident in the UK
  2. Having accommodation in the UK which you use during the tax year
  3. Working for 40 or more days during a tax year in the UK (doing substantiative work).
  4. Spending more than 90 days in the UK during either of the previous two tax years
  5. Spending more time in the UK than any other single country

An individual will need to compare the number of days they are in the UK with the number of UK ties they have. Whether they are a leaver or an arriver. 


Arriver or Leaver - sufficient ties test: