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NOTE FOR ALL USERS:

THIS SITE IS CURRENTLY IN THE PROCESS OF BEING UPDATED TO THE NEW 2022-23 EDITION OF TAXATION OF NON-RESIDENTS AND FOREIGN DOMICILIARIES

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

3 Targeted Anti-Avoidance Rules (TAARs)

Domicile & Residence

4 Domicile

5 Deemed Domicile

6 Residence of Individuals

7 Residence of Trustees

7 Residence of Companies

9 Treaty-Residence

10 Split Years: Arrival and Departure

11 Temporary Non-residence

12 Exit Taxes

13 UK Arrival or Departure: Tax Checklist

Income Tax: Principles & Remittance Basis

14 Income Categorisation

15 Income Recognition: Receive/Entitled/Arise/Paid

16 Source/RFI/Territorial Principles

17 The Remittance Basis

18 The Meaning of Remittance

19 Remittance Reliefs

20 Mixed Funds

Income by Category

21 Trading Income

22 Trading in Land

23 Performers

24 Property Income

25 Deduction of interest from Property Income

26 Interest Income

27 Exempt Interest of Non-Residents

28 Accrued Income Profits

29 Deeply Discounted Securities

30 Dividend Income

31 Annual Payments

32 Intellectual Property Income

33 Misc Sweep-Up Income

34 Employment Income

35 Travel Expenses: Employment Income

36 PAYE

37 Employment Income: DT Relief

38 Pension and Annuity Income

39 Benefit in Kind: Family Home and Chattels

40

IT: General

38 Discretionary Trusts: Income Tax

39 IIP Trusts: Income Tax

40 Rates of Income Tax/CGT

41 Personal Allowances

42 Non-Residents Income Tax Relief

43 National Insurance Contributions

IT avoidance codes

44 Settlor-interested Trust Code

45 Transfer of Assets Abroad: Introduction

46 Transfer of Assets Abroad: Transferors

47 Transfer of Assets Abroad: Benefits

48 Transfer of Assets Abroad: Relief from Overlapping Charges

49 Transfer of Assets Abroad: Motive Defence

50 Profit Fragmentation

51 Transfer of Income Streams

52 Transactions in Securities

Capital Gains Tax

53 Chargeable Gains

54 UK Property Held by Non-Residents

55 Residential Property: CGT

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

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

58 Borrowing by Non-Resident Trust: Sch 4B

59 Sub-Funds

60 Gains of Non-Resident Companies

61 Capital Losses

Funds

62 Life Policies and Contracts

63 Offshore Funds: Definitions

64 Offshore Income Gains

65 Income from Offshore Funds

66 Unit Trusts

67 Intermediated Securities

68 Investment Manager Exemptions

69 Investment Management Fees & Carried Interest

Inheritance Tax

70 IHT Terms and Concepts

71 Excluded Property: Definition

72 Excluded Property Exemptions

73 Wills and IOVs

74 Reservation of Benefit

75 Inter-Trust Transfers: IHT

76 IHT Deduction for Debts

77 IHT Close-Company Code

78 IHT Residential Property Code

79 Family Home and Chattels: Benefit in Kind Charges

80 Pre-Owned Assets

81 Loans from Non-Resident Companies

81A Pension Schemes and IHT

Entities

82 Partnerships

83 Partnership Income: Attribution

84 Estates of Deceased Persons: CGT

85 Estates of Deceased Persons: Income Tax

85A Settlement, Bare Trust, and Associated Terminology

86 Foreign Entities

87 Hybrid Entities

Concepts & topics affecting more than one tax

88 Protected Trusts

89 Non-Dom/Non-Resident Spouse

90 Joint Accounts

91 Foreign Currency Issues

92 Unremittable Assets

93 ATED and SDLT

94 Who is the Settlor?

95 Multiple Settlors

96 Statutory Tax Indemnities

97 Situs of Assets for IHT

98 Situs of Assets for CGT

99 Control Connected Close and Related Expressions

100 Participation & % Investment Tests

101 Permanent Establishment and Branch/Agency

102 Post-Brexit EU Law

103 Double Taxation Arrangements: Introduction

104 DTA Anti-abuse Rules

105 Limitation on Benefits

106 Credit for Foreign Tax

107 Non-discrimination

Double Taxation Agreements: IHT

108 IHT Double Taxation Treaties: Introduction

109 IHT DTAs: India, Pakistan, Italy, France

110 IHT DTA: Netherlands

111 IHT DTA: South Africa

112 IHT DTA: Switzerland

113 IHT DTA: USA

114 Credit for Foreign IHT

Administration

115 Reporting and Compliance

116 Tax Return Filing Position

117 Claims

118 Collection of Tax from UK Representatives

119 Reporting and Compliance: IHT

120 Penalties

120A Failure to Prevent Tax Evasion

121 Common Reporting Standard

122 Trust Registration

123 Reporting Offshore Trusts

124 International Movement of Capital: Reports

125 Money Laundering

Appendices:

Words & Concepts

Appendix 1 Words of Dispute

Appendix 2 Common Legal Expressions

Appendix 3 Family Terminology

Appendix 4 Consideration/Arm's Length/Full Value

Appendix 5 Commercial/View to Profit

Appendix 5A Offshore Fund/CIS/OEIC

Appendix 5B Beneficial Ownership/Entitlement

Appendix 6 What Do We Mean by "Real"

Appendix 7 Deeming Provisions

Special taxpayers

Appendix 8 Parliamentarians

Appendix 9 Visiting Forces

Appendix 10 Students and Teachers

Tax reform

Appendix 11 How to Improve Residence and Domicile Taxation

Appendix 12 Reform of Offshore Anti-avoidance Law

Appendix 13 The Wisdom of Parliament

Appendix 14 Purpose in Tax Statutes

New 2022/23 edition out soon

The new 2022/23 edition of Taxation of Non-residents and Foreign Domiciliaries will be published online on 6 April 2022 and in paper form shortly thereafter.

At present this site contains the text of the 2021/22 edition.

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 2021/22 edition will no longer be valid from 6 April 2022.

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:

- You may purchase a single or multiple user licence: To obtain these contact the publishers.

- Every copy of the printed book has a 3 week trial licence (see inside front cover of volume 1). To order copies of the book email the publishers or go to the publishers' website.

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.

You need to register for the current edition. Registration for an earlier edition is no longer valid.

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 Rebecca Sheldon.

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.

Note: You may need to input your current log-in name and password to access the archive editions, even if you are already logged in to the site for the current online edition.

Contact

If you have technical problems, or problems logging in, click here

To contact James Kessler QC click here

To contact Rebecca Sheldon, who reviews online contributions, click here

For multiple user licences, or to install on a firm's intranet, contact the publishers.

Technical notes

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