Residence and Domicile

Warning: This is currently draft legislation subject to further change potentially after its effective date

A brief summary of where we appear to stand, today

The annual flat rate charge of £30,000 applies only if a claim to benefit from the remittance basis of taxation in that tax year is made.

The charge will apply to certain individuals in 2008/09.

Each tax year you will have the choice of either paying the £30,000 charge and claiming the remittance basis, or not paying the charge and being taxed on your worldwide income and gains on the arising basis.

The charge is in addition to any UK tax that arises on remittances to the UK, but the money brought into the UK to pay the £30,000 charge will not itself be taxable.

There is a £1,000 de minimis limit.

From 6 April 2008 you will lose your personal income tax allowance and your annual capital gains tax exemption if you claim remittance basis. This will apply to resident non UK domiciled taxpayers who have not yet exceeded the seven year residence rule, as well as those who have and choose to pay the £30,000 charge.

The annual flat rate charge will apply to a resident non-UK domiciled individual who has been UK tax resident for at least 7 out of the last 9 tax years immediately preceding the tax year under consideration and a claim to benefit from the remittance basis of taxation in that tax year is made.

If you have any questions, please give us a call, see Contacting Us.

Warning: This is currently draft legislation subject to further change potentially after its effective date

Source:TaxAdviser
The Journal of The Chartered Institute of Taxation and The Association of Taxation Technicians Tax.org.uk.
Source article written by Carolyn Steppler and Jo Quelch, KPMG private client advisory practice
Contact carolyn.steppler@kpmg.co.uk or jo.quelch@kpmg.co.uk

Posted on 11-March-2008