Global mobility means more people are leaving the UK to work abroad, while non-UK nationals are arriving to work here. Your tax residency plays a big part in how this affects your tax position. We’ll help you stay compliant and keep your tax bill under control.
Residence or domicile? Understanding the differences and knowing your resulting obligations is vital for tax purposes, both in the UK and your country of residence. Making an assumption about either status can have serious financial consequences. Fortunately, our specialist tax advisors will help ensure you are tax compliant, not just in the UK but across the world, assisted by our global network of affiliates.
With years of experience in global industries such as Oil and Gas, we are experts in providing high level, cross-border advice for individuals coming to or leaving the UK. We specialise in holistic tax planning advice on the UK or overseas tax implications associated with moving between countries and will recommend strategies to save tax on your earnings and investments.
In tax terms, residence is the country where you spend the most time, whilst domicile is the country you’d describe as your permanent home, even if you don’t live there. Domicile is mostly determined by your family background (particularly your father), although the definition is complex.
UK resident and domiciled
If you’re resident and domiciled in the UK, you’ll pay UK tax on all your income, wherever you earn it, and on your gains. However, different tax rules will apply to your UK income and foreign income and gains. UK Inheritance tax will be due on all your worldwide estate.
Non-UK resident but domiciled in the UK
You’ll be taxed on your UK income and some UK gains, but not on your foreign income or gains. UK Inheritance tax will be due on all your worldwide estate.
Non-UK domicile but resident in the UK
You’ll be taxed on your UK income and gains, and on foreign income and gains if they’re remitted to the UK. But you can claim not to pay UK tax on your foreign income and gains if they’re remitted elsewhere. Inheritance tax will only be due on your UK estate.
Non-UK resident and not domiciled in the UK
You’ll be taxed on your UK income and some UK gains, but not on your foreign income or gains. UK Inheritance Tax will only be due on your UK estate.
Whether you’re UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year). We will:
The remittance basis is an alternative tax treatment available to individuals who are resident but not domiciled in the UK and have foreign income and gains. Remittance basis is not available if you are deemed domicile in the UK.
Using the remittance basis means you pay UK tax on UK income and gains for the relevant tax year, but you’re only liable to pay UK tax on foreign income and foreign gains that you bring or remit to the UK. Again, the rules are complicated, but the remittance basis is useful as it can help you avoid paying tax twice on the same income and gains.
We can advise on how this affects you, and suggest other ways to mitigate tax, such as gaining tax relief by using remittances to invest in a UK business.
It’s critical for individuals to understand how domicile is determined and, importantly, how it impacts their personal tax position. We will:
Despite all this complexity, you can relax and have confidence in our advice. We’ll support you with the combined knowledge and skills of our expert tax specialists here in the UK, but also our counterparts across the world.
We are members of Accelerate, a Business Associate of Crowe Global and of The International Accounting Group. As part of these powerful networks, we have strong and dependable contacts with numerous trusted partners, so we can offer you access to further global specialists with international expertise, in hundreds of countries.
Whilst this wealth of global knowledge is invaluable, we understand you won’t want to contact several different people to get advice. At AAB, we’ll project manage your international tax affairs, collaborating with our worldwide colleagues to deliver seamless tax efficiency and compliance advice. You can trust us to be your single, reassuring and responsive point of contact.
Following many years living and working overseas, returning to the UK raised several complex tax considerations for both my wife and me. The Private Client International Tax Team at AAB guided us through every aspect of our UK re‑entry with clarity and confidence, from confirming our UK tax residence position to explaining how UK tax applies to our income and gains going forward.
David Mendelson
The efforts of the team ensured that timely planning could be undertaken to the overall benefit of my family. AAB clearly demonstrated their expertise here and proved why it is always worth getting the best professionals on the job!
Keith Fletcher
I'm impressed with the “all under one roof” service offered by the private client and AAB Wealth teams, I now have great working relationships with various advisers within the Group. I, and my family, have complete peace of mind.
Niall Webster
I have been a personal tax client of AAB for a number of years and in that time they have guided me through the tax return process and provided me with specialist advice relating to my non-resident tax position.
Peter Williams
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