Everyone has to pay UK tax on UK income but your tax residence and domicile determines how much UK tax you pay on foreign income and capital gains.

UK tax residents who are UK domiciled pay UK tax on foreign income and capital gains.

Non-domiciled UK tax residents don’t pay UK tax on foreign income or capital gains if they’re less than £2,000 in the tax year

• They chose to pay tax on a remittance basis - this when you’re taxed only on your UK income and gains. Foreign income and gains you keep out of the country won’t be taxed.
• Certain tax reliefs or allowances apply to them.

Non-UK residents don’t pay UK tax on any foreign income. They only pay capital gains tax:

• On UK residential property
• In some cases if they have previously had UK tax residence and become UK tax resident again after a limited time.

Most countries tax you differently depending on whether or not you’re considered ‘tax resident’.

Tax residence is a different concept to actual residence. This means that you might legally be tax resident somewhere even if you don’t consider it to be your home.

Tax residence is usually based on:

• How long you’re in the country
• Where your family live
• Where you work
• If you own a home in the country
• How much money and assets you own in the country
• Where the centre of your life is.

The different tax laws in different countries can sometimes conflict, which could mean that you’re tax resident in multiple countries or that you pay tax on the same income twice.

It’s important to plan your tax residence correctly to avoid situations like these – contact us today to find out how we can help.

Under English law, your domicile is the country or state of your permanent home which may be different to the place where you currently live. It can have an impact on the UK income tax, capital gains tax, and inheritance tax that you pay.

You are automatically given your parents’ domicile when you are born. This is known as your domicile of origin.

You keep your domicile of origin until you get a new one. Even if you move abroad, your domicile probably won’t change unless you specifically change it.

You need to meet certain criteria if you want to change your domicile. As a minimum, under English law you’ll have to:

• Move to another country
• Prove that you plan to live there permanently.

The UK has a special rate for long term UK residents who are not domiciled in the UK. Once they’ve been a UK tax-resident for 15 out of the previous 20 UK tax years they are treated as domiciled in the UK (‘deemed domicile’).

We can explain how your move will affect your UK tax situation for any UK and international wealth you own. We’ll tell you about any new rules and regulations that you’ll face and help you with any new reporting responsibilities.

We’ll advise on how you can keep your taxes as efficiently as possible using a variety of laws and treaties rather than artificial schemes or tax engineering. We can also suggest the best way to structure your global assets to ensure full compliance with UK tax law.

Of course, moving to a new country involves far more than taxes. You may also need to:

• Buy a new home
• Get a visa or apply for citizenship
• Amend your Will
• Invest in a business.

Our solicitors can help with all these issues and more. See our immigration page for more information.

We can help with a wide range of issues that might come up if you own property or assets in multiple countries, including:

• UK tax returns, particularly Annual Tax on Enveloped Dwellings (ATED) returns for UK properties
• Asset protection
• Will writing and estate planning
• Forced heirship laws in certain countries that restrict who can inherit your assets.

We’re well known for our international tax expertise and our team includes numerous renowned industry experts.

We have excellent contacts with the offshore finance world and with the banks, wealth managers and third party service providers who you need to structure their assets effectively.

We have structured tens of billions of assets for a wide range of clients all over the world including entrepreneurs, business people, and families with inherited wealth.