UK tax liability on arrival in the UK

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • UK tax liability on arrival in the UK
  • Introduction
  • The UK tax structure
  • Income tax
  • Capital gains tax
  • Temporary non-residence
  • Relief for foreign tax paid
  • Inheritance tax
  • Reporting requirements

Introduction

This note is an outline of many complex issues. It summaries the position and indicates which guidance notes will provide further information.

The starting point is that UK tax liability depends on two key factors:

  • residence
  • domicile

Residence refers to the individual’s tax status on a year by year basis. Domicile is the place which a person regards as his true home.

Up until 5 April 2013, a taxpayer’s ordinary residence status was the third key factor. Ordinary residence arises as a result of a settled purpose and so looks at the position over the longer term. The concept was abolished for tax purposes from 6 April 2013, although there are transitional provisions for up to three years for those who are not ordinarily resident in the UK and are adversely affected by the changes. Therefore you may have to consider a taxpayer’s ordinary residence status until 2015/16. See the Ordinary residence - years to 5 April 2013 and Ordinary residence - transitional rules (2013/14 to 2015/16) guidance notes.

A person coming to the UK other than for a one-off short visit, should thus consider whether he is resident and / or domiciled in the UK. These concepts are all explained in the Determining residence status (2013/14 onwards) and Domicile guidance notes.

The Residence - issues on coming to the UK (2013/14 onwards) guidance note provides more detail on the residence questions faced by new arrivals.

The UK tax structure

There are a large number of taxes in the UK, but the ones which are most likely to impact on new arrivals are income tax, capital gains tax, inheritance tax and national insurance.

The first three are covered briefly below. For the

More on Coming to the UK: