Residence and Domicile FAQs
HMRC have published a further batch of answers to Frequently Asked Questions (FAQs) and received both from the public and taxation specialists on residence and domicile issues.
The document includes answers to questions on Capital Gains Tax Losses which is likely to be of particular interest given the current worldwide economic conditions. Amongst the other topics covered are non-resident trusts, personal allowances, remittances, the new £30,000 tax charge, offshore life-insurance policies and nominated income and gains.
One of the answers relates to whether the £30,000 charge will apply to individuals who are resident in both the UK and a second country with which the UK has a Double Taxation Agreement. HMRC make it clear that all years of actual residence in the UK will count towards the ‘more than seven years out of ten’ test even if the taxpayer was treated as ‘treaty resident’ in another country. This contrasts with most other situations where a taxpayer is dual resident and treaty residence is in the other country. Normally taxing rights on non-UK source income or gains will lie with the other country. If such an individual is exceptionally subject to UK tax on overseas income or gains then they will need to decide whether to pay the £30,000 charge and claim the remittance basis or to pay tax on an arising basis.