Tax residency is a very complex area of tax which can be intricate and highly fact-specific; UK Tax Returns specialises in navigating this niche with clarity and confidence. Determining your UK tax residency is a foundational step in assessing an individual’s liability to UK tax assessment on income or gains.
Having your tax residency status determined accurately is critical because UK residents are generally taxable on their worldwide income and gains, and by comparison meeting criteria to be taxed as a Non-Resident can have many tax advantages from the UK tax perspective.
DID YOU KNOW – you can spend as few as 16 days in the UK and be regarded as a UK tax resident? It is a very common misconception that you are able to spend 182 days here before residency becomes a factor, but this is far from true as the day count is just one small aspect of residency legislation.
There is no quick answer to this – but you can spend a few a 16 days in the UK and be regarded as a tax resident under our domestic laws. There are many other factors that are considered for residency such as your quality of “ties” to the UK.
UK residency is determined separately for each tax year, and so even small changes in travel patterns or personal circumstances can change your tax status one year to the other.
Usually if a source of income arises from (originates from) the UK then the default position is that the income is taxable in the UK. However, we can often exempt certain classes of income from UK tax assessment as the Double Taxation Agreement in place with your country of residence might allow us to exempt the income. The DTA’s vary from country to country. UK rental income and sales of UK property is always taxable in the UK.
Yes. It is possible that you will trigger residency criteria is more than one country at the same time because each country will have their own domestic laws. When this happens there will be ‘tie-breaker’ tests available that effectively overrides both countries domestic law and a determination can be made as to where you are regarded as Treaty Resident.
UK Tax Returns assist clients with complex residency issues daily and no two set of circumstances are identical. We can consult on your specific personal circumstances to advise on the tax parameters so that you can understand at what point you will become either UK tax resident or Non-Resident, and how your UK or Worldwide income will be treated for tax going forward.
We are fully versed on a wide range of tax issues, and we will ensure the correct residency determination is made. If you are planning any significant life changes that might involve moving to the UK or overseas, it is of vital importance to consider your tax position before making any big decisions such as selling property or other investments.