For Business & individuals

Residency & Domicile

UK tax doesn’t necessarily stop just because you live abroad. Residency and domicile rules are becoming increasingly complicated, even while the workforce becomes more mobile than it ever has been.

How can we help?

If you are an entrepreneur, employee or retiree looking to settle here or across waters, Hazlewoods can help you on every step of your journey.

Determining residence status for UK taxes – personal, trusts and corporate
UK taxation and filing responsibilities
Worldwide tax advice through our membership of HLB International
Onshore and offshore structuring and planning
Immigration and emigration advice across all taxes, be it personal, corporate or VAT
Advice on domicile status for individuals and trustees
Statutory Residence Test advice*

Residency or domicile?

In the UK, tax residency and domicile often get mixed up, and the phrases used interchangeably, when in fact, it is possible to be tax resident and non-domiciled at the same time, as well as the reverse. Both are defined quite differently, and have distinct affects for UK taxation.

Residency

Tax residency is determined by the very formulaic Statutory Residence Test*, and is usually associated with chargeability to income tax and capital gains tax. There is a limited cross over, where so-called “non-doms” can get income, capital and inheritance tax advantages, even if they are UK tax resident.

Domicile

Domicile however, is based on a long history of case law, supplemented by the “deemed domicile” legislation. Domicile is the main driver behind whether someone will pay inheritance tax on just their UK assets, or their world-wide estate.

In the UK, there is a limited cross over, where so-called “non-doms” can get income, capital and inheritance tax advantages, even if they are UK tax resident. If you would like advice on your own individual status, please contact the team.

*Statutory Residence Test

Since 2013, the statutory residence test (SRT) was introduced that then wiped away all previous case law and the ’90 day’ rule. It is a series of complicated tests to determine the maximum number of days an individual may be present in the UK without becoming a tax resident. We regularly guide our clients through the process, so please contact our expert tax adviser Glenn Collingbourne for further advice.

Client story

Determination of corporate residency

Background: We were approached by an offshore company trading in the Far East looking to expand its operation to the UK by formation of a UK company. Some board members would be relocating to the UK while some would regularly travel to the UK for business.

How we helped: The initial enquiry to us was in connection with basic compliance work for the UK entity, but after analysing the structure it quickly became apparent that the relocation of the board of directors would bring the offshore profits into UK corporation tax, even though the trade remained abroad. By recommending a change to the decision hierarchy, the non-UK profits were retained abroad, leaving only the UK profits taxable as originally intended.