Tax services

Residency

Home is more than a residence

The country you live and work in, the country you call home, and the country where you pay tax may not necessarily be the same. And the choices you make for each can have a significant impact on how much UK tax you pay, if any.

Residence versus domicile

Your domicile is the country you regard as your permanent home, whereas your residence is simply a place you choose to live for a time. You can only have one domicile at a time, but it’s possible to be resident in more than one country at once, depending on how you’ve spent your time and the rules in each country.

If you’re not careful about how much time you spend in each of your chosen residences, you could end up paying twice as much tax.

We’ll help you to determine your residence and domicile and recommend any adjustments to how you spend your time in order to minimise your tax bill.

The impact of your domicile status

Your domicile status effects how much income tax, capital gains tax and inheritance tax you may be required to pay, so it’s essential to carefully consider how and where you split your time.

  • A British domiciled person is liable to pay inheritance tax on their entire estate wherever it is in the world.
  • A ‘non-dom’ is liable to pay UK inheritance tax only on their UK property, unless they are ‘deemed’ UK domiciled.
  • There’s also a £325,000 limit on the amount a non-dom spouse can inherit free of IHT, providing they haven’t elected to be treated as UK domiciled.

Non-domicile status has come under the spotlight in recent years, with the government closing loopholes and tightening the rules in order to bring in more money and reduce the tax gap. We will help you to comply with any and all tax rules in order to make the most of your money both here in the UK and overseas.

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