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Scope of this book

There are three themes to this book:

(1) Taxation of foreign domiciliaries

(2) Taxation of non-residents on UK assets

(3) Taxation of UK residents on foreign assets

To attempt to cover these topics comprehensively is ambitious, perhaps quixotic. This book is in danger of bursting, particularly because these territorial issues can only sensibly be discussed in a wider context. But one cannot address the first topic without the second and third: in taxation, as in life, everything is connected. Thus what started as a book on foreign domiciliaries has become a book which seeks to address all the territorial limits to UK taxation.

The year 2016/17 in review

OTS stated in 2017:

The UK tax code is widely cited as being the longest in the world”.[1]

This claim had been made at least since 2010.[2] In recent years Parliament added:[3]

FA 2011: 403 pages
FA 2012: 703 pages (a record)
FA 2013: 648 pages
FA 2014: 663 pages
FAs 2015: 562 pages
FA 2016: 649 pages
FA 2017: 776 (a new record)[4]

In the same period, OTS has not achieved anything perceptible, at least in relation to the topics covered in this book. [5] It is easier to talk of simplification:

Our system remains too complicated ... We will therefore simplify the tax system. [6]

The reader may think that the satirists better identify the reality:

We will further complicate the UK tax system so that large companies can no longer find loopholes. [7]

Scotland continues its fiscal drift from the UK, with Northern Ireland and Wales set to follow. The F(no.2)A 2017 has introduced deemed domicile rules, rewritten the taxation of offshore trusts, and extended IHT to companies holding UK residential property. The courts have decided many interesting cases, including Barclays Wealth v HMRC, R (Hely-Hutchinson) v HRMC, Lee v HMRC , and Children’s Investment Fund Foundation v AG. OECD has produced the BEPS convention, noting, I think correctly:

International tax issues have never been as high on the political agenda as they are today.

The future

Autumn budget 2016 announced an unexpected proposal to move non-resident companies from IT to the corporation tax regime. This might be necessary while the UK remains in the EU to avoid freedom of establishment issues of taxing foreign companies more than UK ones. But it will add to complexity, and the length of this book. CT is a more sophisticated tax than IT, in many respects, in particular the taxation of interest (loan relationships) and hybrids. Private client practitioners advising foreign companies will have to master CT rules which hitherto they could leave for corporate tax practitioners. The government will have to map out a strategy and tactics for unravelling the UK’s connections with the EU. This is a daunting task, and will take a generation if not more. We face an extended period of uncertainty, in politics, economics, law and taxation. We will continue to live in fiscally exciting times.

==Thanks ...and request for help==

I am very grateful to my colleagues in chambers, especially Robert Venables QC, Amanda Hardy QC and Philip Simpson QC, for discussions on many aspects of tax. Yakshini Peerthum as research assistant resolved many puzzles . I owe a great debt to Jane Hunt and Ruth Shaw who work patiently on this challenging text throughout the year. Comments from readers and professional clients continue to be of the greatest value and interest to the author. The pleasure in writing this book consists in the interest of the questions which it raises, and the success which it may have achieved in answering them. It seeks to state the law as at 1 December 2017.

James Kessler QC

Old Square Tax Chambers

15 Old Square

Lincoln's Inn



Further advice

If you want advice on which you are legally entitled to rely you can obtain it - but not from this work.

In particular, you may instruct the author to advise. I enjoy writing, but spend most of my time giving independent specialist professional advice in private client matters, especially areas covered in this work. For further details see

TFD Online

TFD Online is an online version of this book and more. It can be used:

(1) to search the text of this book or to access it online.

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TFD Online is moderated by Oliver Marre, a member of Tax Chambers, 15 Old Square, Lincoln's Inn.

TFD Online is accessible on An authorisation code for a 3 week trial period is in the inside cover of this volume.


CIOT issue professional guidance with a disclaimer:

While every care has been taken in the preparation of this guidance the PCRT Bodies do not undertake a duty of care or otherwise (?) for any loss or damage occasioned by reliance on this guidance. Practical guidance cannot and should no be taken to substitute appropriate legal advice.[8]

When that appeared in 2011 it seemed extraordinary. But it rapidly became ubiquitous; nowadays no professional body ever issues guidance without a disclaimer (often including a statement, which seems bizarre to me, that guidance on the law "does not constitute legal advice".) Similarly, and a fortiori, the views expressed in this book are put forward for consideration only and are not to be relied upon. Neither the author nor the publisher accept any responsibility for any loss to any person arising as a result of any action or omission in reliance of this work. But could anyone have thought that a claim could arise in absence of this disclaimer?

A note to the lay reader

This book is not intended as a self-help guide, and is addressed to tax practitioners, but it is readable for a lay person. Initiation in these matters must often be by the taxpayer. If you wish to research this subject in depth, and so take more control of your own tax affairs, read on. But for implementation you will need to find professionals to advise you. Self-help guides extol "the benefit of bypassing expensive lawyers"; but the bypass may prove the more expensive route in the long run.

Edition history

1st Edition 2001 5th Edition 2006 9th edition 2010 13th edition 2014
2nd Edition 2003 6th edition 2007 10th edition 2011 14th edition 2015
3rd Edition 2004 7th edition 2008 11th edition 2012 15th edition 2016
4th Edition 2005 8th edition 2009 12th edition 2013 16th edition 2017

This book was called Taxation of Foreign Domiciliaries for 9 editions; it changed to Taxation of Non-Residents and Foreign Domiciliaries in the 10th edition.


  1. It is hard to empirically assess the claim that the UK has the longest tax code in the world, and OTS makes no attempt to do so. But if any readers ae aware of other serious contenders for that title, I would be interested to hear.
  2. For the older references see the Introduction to the 15th (2016/17) of this work.
  3. Finance Act page counts are a rough proxy for the ever growing complexity of the UK tax system, but not an altogether bad one. A (slightly) better proxy would also consider secondary legislation and HMRC guidance; and, perhaps, case law; then the page counts would multiply the Finance Act numbers set out here tenfold. For a discussion of the multidimensional concept of tax complexity, see Tran-Nam and Evans, “Towards the Development of a Tax System Complexity Index” (2014) Fiscal Studies Vol 35 p.341. The OTS have published two (somewhat simplistic) discussions of tax complexity: Length of Tax Legislation as a Measure of Complexity (Apr 2012) The OTS Complexity Index (2012)
  4. This is the size of the original Finance Bill 2017.
  5. See eg IFS, “OTS: Looking Back and Looking Forward” TLRC Discussion Paper No. 11 (2014) tactfully referring to “insufficient buy-in to the simplification process by HMRC, HM Treasury and government”. In (I think) 2013 the government came up with the slogan “Creating a simpler, fairer tax system” under which the OTS now operates; which imagines away a troubling reality in which simplicity and fairness are competing values which require hard choices.
  6. Conservative party manifesto 2017 p.14
  8. CIOT, Professional Conduct in Relation to Taxation (2015), para 1.10 The second sentence is an improvement on the common but rather bizarre form that guidance on legal issues “does not constitute legal advice”. The Law Society likewise issue a disclaimer for their Practice Notes: The standard form is: “While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.”