Q. If I am resident but not domiciled in the UK, what income tax will I be subject to?
Answered by Esther Carder, Partner, Kingston Smith
A. For individuals who are not domiciled in the UK (i.e. do not have their permanent home in the UK) the income tax rule can be modified so that their non-UK income is taxed in the UK on the ‘remittance basis’.
This means that you only pay UK tax on the income or gains you bring to the UK. Non-UK domiciled individuals who are being taxed on this basis will not have the benefit of the personal allowance and the annual exempt amount for capital gains tax purposes.
Once an individual has been resident for more than seven of the previous nine years, an annual remittance basis charge will apply, starting from £30,000 per annum.
From 6 April 2017 anyone who has been resident in the UK for 15 or more out of the previous 20 tax years will be deemed to be UK domiciled for Income Tax, Capital Gains Tax and Inheritance Tax purposes.
Income tax rates vary from 20% to 40%. Please go to www.ks.co.uk/taxfacts for all the rates.