Tim Kelley of Numera LLP presents the information you need to know to determine personal domicile, residency and tax status for optimal benefits. He also touches upon the protection of IP and innovations.

1. 
UK TAXATION FOR MOBILE
PROFESSIONALS
Tim Keeley
BSc TEP
CTA (Fellow)
Numera LLP

2. SCOPE OF TAXATION –
UK RESIDENT INDIVIDUALS
 UK resident and domiciled individuals - Liable to the following taxes on a worldwide basis:
 Income Tax
 Capital Gains Tax
 Inheritance Tax (charged on the estate of an individual upon death)
 UK resident but non-UK domiciled individuals
 Worldwide basis of taxation applies. However (and usually by election) a non-UK domiciled individual can
reduce his tax liability to the following:
 UK source income and capital gains
 Inheritance Tax on UK located assets only
 No tax on foreign source capital gains provided that there is no remittance of such income or gains to
the UK
 By further planning, normally by using a trust, sometimes in conjunction with a non-UK resident
company, the following can also be achieved for non-UK domiciled individuals:
 No Capital Gains Tax on the gains arising from any assets unless those gains are remitted to the UK
 No Inheritance Tax even on UK located assets (apart from UK residential property which will remain
liable to IHT from 6 April 2017)

3. SCOPE OF TAXATION -
NON - UK RESIDENT
INDIVIDUALS
 UK non-resident but still UK domiciled individuals - Liable to the following taxes:
 Income Tax on UK source income only
 No Capital Gains Tax on disposal of any assets apart from gains on the disposal of UK
residential property (but not the main family home)
 Inheritance Tax on worldwide assets (not merely UK assets)
 UK non-resident and non-UK domiciled individuals
 Income Tax on UK source income only
 No Capital Gains Tax on disposal of any assets apart from gains on the disposal of UK
residential property (but not the main family home)
 Inheritance Tax on UK assets only

4. PRINCIPAL UK TAX RATES
 Income Tax – 0-45% (45% applies to all income above £150,000)
 Capital Gains Tax – main rate is 20% but 28% rate applies to gains on disposal of UK
residential property (but not your main or only family home)
 Inheritance Tax – 40% - which applies to the value of the estate above the exempt limit
of £325,000 which is not taxable

5. UK TAX ADMINISTRATION
BASIC POINTS
 The UK tax year runs from 6 April to 5 April – the UK does not operate a calendar year for
tax purposes
 Taxes are administered by H M Revenue & Customs (HMRC)
 Individuals who are liable to tax have to inform HMRC of this fact
 UK employment income is normally taxed by the employer, who deducts the tax and
passes on the tax to HMRC
 Self employed individuals and shareholders of companies do not usually have tax deducted
from their income
 If you are not sure if you have to complete tax returns for UK purposes, take professional
advice

6. WHY DOES ALL OF THIS
MATTER?
 Because your UK tax liability will depend upon the following questions:
 Are you already UK tax resident?
 Are you not yet UK tax resident but intending to come to the UK?
 If so for how long do you intend to say in the UK?
 If you decide to live in the UK, do you intend to remain here permanently or to leave at
some point to return to your home country or to live elsewhere?
 If you are currently UK tax resident, are you intending to leave in order to live and work
abroad?
 If you intend to move abroad, will this be for a limited period or do you intend to live
outside the UK permanently?

7. WHAT OTHER FACTORS ARE
IMPORTANT?
 If coming to the UK from overseas – the tax regime of the country where you currently
reside
 If leaving the UK – the tax regime of the country to which you intend to relocate
 Your UK domicile – probably more likely to be important for persons who come to the UK
from overseas and/or persons who were born to a family of non-UK origin
 The value of any overseas wealth that you may have
 (Possibly) any members of your family who are living overseas

8. HOW IS UK TAX RESIDENCE
DETERMINED?
 By a statutory residence test that was introduced from 6 April 2013
 Its rules are complex. However a person who is in the UK for 183 days or more in the UK
tax year is automatically UK tax resident.
 However a person who spends more than 16 days in the UK tax year can also sometimes
be UK tax resident.
 Best to take advice if you are not sure if you are tax resident, and especially if:
 You are planning to come to the UK to live and work
 You are already in the UK but don’t know your tax residence status
 You are planning to leave the UK to live elsewhere
 Tax residence is not the same concept as having a visa or permission to live in
the UK which might be granted by the UK immigration authorities

9. WHAT ABOUT MY DOMICILE?
 A foreign domiciled individual may be able to reduce his liability to taxes in the UK,
especially if he may have foreign income, capital gains and non-UK assets of substantial
value.
 If this is likely to apply to you – best to take professional advice
 Domicile is a complex area but a few key points are listed below
 Domicile is not the same as tax residence – so an individual can have a different tax
residence to his domicile. Nor is domicile the same concept as citizenship
 A person born to overseas parents who is living in the UK but does not intend to do so
permanently may still have a foreign domicile
 A person born to UK parents will find it very difficult to lose his UK domicile unless he:
 Decides to and actually moves to live overseas and
 Intends to live in the adopted country overseas indefinitely
 From 6 April 2017 any person who has lived in the UK for 15 tax years or more will be
treated as domiciled in the UK for tax purposes even if his domicile for other areas of UK
law remains overseas

10. WHAT PLANNING OPTIONS
MIGHT BE AVAILABLE TO ME?
 You may be able to take steps to reduce your UK tax liabilities depending upon your
current and anticipated tax status.
 The key points are:
 Planning before you become UK tax resident
 Planning whilst you are UK tax resident
 Planning if you are intending to leave the UK
 Avoiding artificial and aggressive planning which HMRC are increasingly attacking – if
something sounds too good to be true it probably is too good to be true
 If there are overseas taxes in the country that you are leaving in order to come to the UK,
or in the country that you may be moving to if leaving the UK, overseas tax advice may
also be essential

11. PLANNING OPTIONS
ARRIVING IN THE UK
EXAMPLES
 Protecting overseas income and capital from UK taxation before arrival
 Keeping income generated overseas in separate bank accounts from UK source income
 Claiming the remittance basis of taxation once you become UK tax resident especially of
you have significant overseas income

12. PLANNING OPTIONS
ALREADY RESIDENT IN THE UK
EXAMPLES
 Keeping income generated overseas in separate bank accounts from UK source income
 If foreign domiciled, taking action to limit the taxation of overseas income and assets –
especially if you are at risk of becoming UK domiciled
 Don’t overlook your UK income and how it might be structured. Consider:
 Pension planning
 Tax efficient investments
 Structuring some of your income through a company (UK Corporation Tax rate is only
20% and may fall to 16% in the next few years – UK Income Tax rates can be as high
as 45%)
 Dividing income and assets among other members of the family

13. PLANNING OPTIONS
LEAVING THE UK
EXAMPLES
 Checking the tax regime of the country where you intend to relocate
 Paying dividends from UK companies until you are no
longer UK tax resident (no tax on dividend)
 Delay capital gains disposals until non-UK resident
 If intending to leave the UK permanently, keep your domicile status under review – if you
acquire a foreign domicile there may be greater opportunities available

14. OTHER MATTERS
 Make sure (in particular if you hold significant assets) that you have a valid Will in place
especially for UK assets
 Some countries have succession laws on death which work upon forced heirship – a person
may not then be free to leave his assets on death in accordance with his wishes.
Sometimes planning ahead can reduce this risk
 Taxation does not stop at ‘The White Cliffs of Dover.’ If your family is internationally
based, the advice that you need might also need an international element.
 Such advice may also require an understanding of the different interpretations that some
territories place upon structures that are recognised in the UK but may be perceived
differently overseas

15. AND FINALLY
 UK taxation is a complex subject. It covers several thousand pages of legislation and tax
cases. Even tax experts do not always agree on how every aspect of the law should be
interpreted
 It has been possible to cover only a few basic concepts in this brief presentation and even
then only in the most general terms
 I hope this has been helpful but no liability can be accepted for any planning that is
undertaken without suitable professional advice having been obtained
 Remember also that there are other things in life to worry about apart from taxation!
 Don’t be fooled by those who may offer tax schemes that may appear to promise more
than is realistic

16. THANK YOU FOR
PARTICIPATING
Tim Keeley BSc TEP CTA(Fellow)
Numera LLP
Tel: 0044 207 794 5757
E mail: tk@numerallp.com