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Where Taxpayers and Advisers Meet

Deemed domicile rule

tiengodue
Posts:29
Joined:Sat Sep 05, 2020 10:01 am
Deemed domicile rule

Postby tiengodue » Wed Feb 24, 2021 7:05 pm

Hello,

I have a question about the rule regarding being deemed domiciled if resident in the UK for 15 of the last 20 years.

a) does the residency mean tax resident or just resident?

b) does it apply just to inheritance tax or also income and capital gains tax?

Many thanks

maths
Posts:8209
Joined:Wed Aug 06, 2008 3:25 pm

Re: Deemed domicile rule

Postby maths » Wed Feb 24, 2021 9:10 pm

Deemed dom rules now apply for all three taxes albeit slightly differently.

Residency refers to tax residency as determined under UK law contained in FA 2013.

riccardob
Posts:105
Joined:Sun May 29, 2011 10:02 am

Re: Deemed domicile rule

Postby riccardob » Wed Feb 24, 2021 10:19 pm

Deemed dom rules now apply for all three taxes albeit slightly differently.

Residency refers to tax residency as determined under UK law contained in FA 2013.
interesting post. in relation to the residency answer, what happens if one was tax resident abroad under a DTA tie breaker rule for that period?
would the 15 year out of 20 still apply or would the dta tie break result over rule the 15 out of 20 rule?

maths
Posts:8209
Joined:Wed Aug 06, 2008 3:25 pm

Re: Deemed domicile rule

Postby maths » Wed Feb 24, 2021 11:27 pm

An individual is deemed domiciled for UK income/capital gains taxes if under UK domestic law the individual is, for example, resident for 15 out of last 20 UK tax years.

If the individual was for one or more of these 20 tax years resident outside the UK under an income tax/CGT DTA tie-breaker test this has no impact on the deemed domicile status. The individual remains deemed domiciled in the UK.

So, no, the tie-breaker would not preclude the 15/20 rule from applying.

For UK IHT purposes the impact of an IHT DTA varies according to whether the deemed IHT rules apply for IHT DTA purposes.


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