Non-resident non-domiciliaries—income tax and capital gains tax issues
Produced in partnership with Emma Pearce of Pump Court Tax Chambers
Non-resident non-domiciliaries—income tax and capital gains tax issues

The following Private Client guidance note Produced in partnership with Emma Pearce of Pump Court Tax Chambers provides comprehensive and up to date legal information covering:

  • Non-resident non-domiciliaries—income tax and capital gains tax issues
  • Residence
  • Capital Gains Tax
  • Income tax–foreign income
  • Income tax–UK income

The Practice Note deals with the income tax and capital gains tax (CGT) issues arising for individuals who are not UK resident and not domiciled in the UK (ie neither actually domiciled nor deemed domiciled in the UK). Note that where the individual is not resident in the UK, the rules set out below for income tax and CGT will generally apply irrespective of the individual’s domicile status.

Residence is not generally a relevant concept for inheritance tax (IHT) purposes; instead the relevant concept is domicile. However, the residence status of the individual will be relevant in carrying out IHT planning because potential charges to income tax and CGT will need to be taken into account.

Residence

This Practice Note sets out the position for persons who are not UK resident, referred to as non-residents. The residence of an individual is now determined by a statutory test. For further information on the statutory residence test see the Residence after 5 April 2013, The structure of the statutory residence test and The statutory residence test—key concepts and definitions Practice Notes.

Capital Gains Tax

Non-resident individuals are not generally subject to CGT, whether the assets giving rise to the gain are situated in the UK or elsewhere.

There are four exceptions to this rule:

  1. Non-residents carrying on a trade in the UK