Introductory guide to residence and domicile for UK tax purposes
Introductory guide to residence and domicile for UK tax purposes

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Introductory guide to residence and domicile for UK tax purposes
  • Current and former UK tax residency tests
  • Tax implications of UK residence
  • Remittance basis
  • Tax implications of UK domicile
  • UK residential property held indirectly by non-domiciliaries
  • HMRC's domicile guidance
  • Reporting non-UK domicile
  • Domicile enquiries
  • Deemed domicile for IHT, income tax and CGT
  • more

The concepts of residence and domicile are used to establish the extent of an individual's liability to UK taxation. This Practice Note provides a summary of the UK income tax, capital gains tax (CGT) and inheritance tax (IHT) implications for an individual of being resident and/or domiciled in the UK.

An individual who is UK resident and UK domiciled will have the closest connection to the UK and accordingly will generally pay income tax, CGT and IHT to the full extent of their worldwide income, gains and assets. In contrast, a person who is neither UK tax resident nor UK domiciled, will incur only a limited liability to UK tax on his UK situs assets. Those who are UK tax resident but who are non-UK domiciled may claim the benefit of the remittance basis of taxation in relation to their foreign income and gains and may avoid IHT altogether on their non-UK situs assets.

Current and former UK tax residency tests

Residence refers to the individual's tax status on a year-by-year basis and domicile is the place which a person regards as his true home. The UK's first formal tax residency test for individuals known as the statutory residence test (SRT) took effect on 6 April 2013. Before this, whether an individual was tax resident in the UK or not was