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This site provides comprehensive information about:

1. Taxation of foreign domiciliaries
2. Taxation of non-residents on UK income and assets
3. Taxation of UK residents on foreign income and assets
4. Other topics arising in this context, including tax avoidance, and disclosure and compliance

It is the online version of Taxation of Non-Residents and Foreign Domiciliaries by James Kessler QC.

Contents

Update

Introduction

Non-dom policy & avoidance'

1 Foreign Domicile: Tax Policy

2 Tax Avoidance

Domicile & residence

3 Domicile

4 Deemed Domicile

5 Residence of Individuals

6 Residence of Trustees

7 Residence of Companies

8 Treaty-Residence

9 Split Years: Arrival and Departure

10 Temporary Non-residence

11 Exit Taxes

12 Appendix 14 UK Arrival or Departure: Tax Checklist

xx

11 A Income Categorisation

11 B Source/RFI/Territorial Principles

12 The Remittance Basis

13 The Meaning of Remittance

14 Remittance Reliefs

15 Mixed Funds

16 Trading Income

17 Trading in Land

18 Performers

19 Property Income

20 Deduction of interest from Property Income

21 Interest Income

22 Exempt Interest of Non-Residents

23 Dividend Income

24 A Annual Payments

24 B Intellectual Property Income

25 Misc Sweep-Up Income

26 Employment Income

27 Travel Expenses: Employment Income

28 PAYE

29 Employment Income: DT Relief

30 Pension and Annuity Income

31 Discretionary Trusts: Income Tax

32 IIP Trusts: Income Tax

33 Settlor-interested Trust Code

34 Transfer of Assets Abroad: Introduction

35 Transfer of Assets Abroad: Transferors

36 Transfer of Assets Abroad: Benefits

37 Transfer of Assets Abroad: Relief from Overlapping Charges

38 Transfer of Assets Abroad: Motive Defence

39 Profit Fragmentation

40 Transfer of Income Streams

41 Life Policies and Contracts

42 Offshore Funds: Definitions

43 Offshore Income Gains

44 Income from Offshore Funds

45 Accrued Income Profits

46 Deeply Discounted Securities

47 Unit Trusts

48 Intermediated Securities

49 A Partnerships

49 B Partnership Income: Attribution

50 Non-Resident Income Tax Relief

51 Collection of Tax from UK Representatives

52 Investment Manager Exemptions

53 Investment Management Fees & Carried Interest

54 Loans from Non-Resident Companies

55 Transactions in Securities

56 Rates of Income Tax/CGT

57 Personal Allowances

58 National Insurance Contributions

59 Chargeable Gains

60 UK Property Held by Non-Residents

61 Residential Property: CGT

62 Gains of Non-Resident Settlor-Interested Trusts: s.86

63 Capital Payments from Non-Resident Trusts: s.87

64 Borrowing by Non-Resident Trust: Sch 4B

65 Protected Trusts

66 Sub-Funds

67 Gains of Non-Resident Companies

68 Capital Losses

69 Foreign Currency Issues

70 Unremittable Assets

71 Double Taxation Arrangements: Introduction

72 DTA Anti-abuse Rules

73 Limitation on Benefits

74 Credit for Foreign Tax

New Non-discrimination

75 Post-Brexit EU Law

76 Excluded Property: Definition

77 Excluded Property Exemptions

78 Wills and IOVs

79 Reservation of Benefit

80 Inter-Trust Transfers: IHT

81 IHT Deduction for Debts

82 IHT Close-Company Code

83 IHT Double Taxation Treaties: Introduction

84 IHT DTAs: India, Pakistan, Italy, France

85 IHT DTA: Netherlands

86 IHT DTA: South Africa

87 IHT DTA: Switzerland

88 IHT DTA: USA

89 Credit for Foreign IHT

90 IHT Residential Property Code

91 Family Home and Chattels: Benefit in Kind Charges

92 Pre-Owned Assets

93 Non-Dom/Non-Resident Spouse

94 Joint Accounts

95 ATED Taxes

96 Estates of Deceased Persons: CGT

97 Estates of Deceased Persons: Income Tax

98 Who is the Settlor?

99 Multiple Settlors

99B Statutory Tax Indemnities

100 Situs of Assets for IHT

101 Situs of Assets for CGT

102 Foreign Entities

103 Hybrid Entities

104 Control Connected Close and Related Expressions

105 Permanent Establishment and Branch/Agency

106 A Reporting and Compliance

106 B Tax Return Filing Position

107 Claims

108 Reporting and compliance: IHT

109A Common Reporting Standard

109B Trust Registration

110 Reporting Offshore Trusts

110B International Movement of Capital: Reports

111 Penalties

112 Money Laundering

Appendices

Appendix 1 Words of Dispute

Appendix 2 Common Legal Expressions

Appendix 3 Family Terminology

Appendix 4 Consideration/Arm's Length/Full Value

Appendix 5A Commercial/View to Profit

Appendix 5B Income Recognition: Receive/Entitled/Arise/Paid

Appendix 6 Associated Operations: IHT

Appendix 7 Deeming Provisions

Appendix 8 The Territorial Principle

Appendix 9 What Do We Mean by "Real"

Appendix 10 Parliamentarians

Appendix 11A Visiting Forces

Appendix 11B Students and Teachers

Appendix 12 How to Improve Residence and Domicile Taxation

Appendix 13 Reform of Offshore Anti-avoidance Rules

Appendix 15 The Wisdom of Parliament

Appendix 16 Participation Test

2021/22 edition

This site is in the process of being updated with the text of the 2021/22 edition of Taxation of Non-residents and Foreign Domiciliaries A paper version of the 2021/22 edition will be available in June.

To access TFD online, you will need an online licence. To obtain this, go to the publishers website or email [email protected]

Licences for the 2020/21 edition will cease to be valid on 6th April.

If you are an academic or other non-tax practitioner who wants access for research purposes, contact James Kessler

How to login

Most of this site requires you to login. To obtain a login licence:

• • • Every copy of the printed book has a 3 week trial licence (see inside back cover of volume 1) To order copies of the book email the publishers or go to the publishers' website.
• • You may purchase a single or multiple user licence: To obtain these contact the publishers.

• • • Without logging in, you can access:

Chapter 1 Foreign Domicile: Tax Policy

Chapter 2 Tax Avoidance.

You enter this site once you have registered and logged in by clicking on the index on the left, or you can search the text.

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Comments please

Users can also contribute to the text and if you can add anything, or spot anything that needs to be corrected, please do! A copy of the next edition of the book will be given to the user who makes the most edits. User contributions are reviewed by Ross Birkbeck.

If you want further advice

If you do not find the answer to your question here, or if you want advice on which you can legally rely, you may instruct James Kessler QC or other members of his chambers to advise. See How to instruct James Kessler QC.

Archive editions

There are archive editions for years since 2003/04. These will be useful to investigate the tax position in earlier years, but the current edition will generally be the best starting point, as that has been written in the light of current HMRC guidance, and further thought and research.

Contact

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Technical notes

TFD online is a Wiki on the lines of Wikipedia, but only registered users can edit the text.