Reylan

Hi There,

I've been trying to determine the difference between the two. I understand that Non UK Resident applies to tax matters in the UK but that IHT may be affected under Domicile. All I can find out is that you 'become' domiciled in a country after 3 years away from the UK (although I understand this is not law) but that there are loopholes and anomolies. Does anyone know anything about this?

chc4me

Hi Reylan,
A complex issue.... Advice in this area is essential as a little knowledge can be a dangerous thing when it comes to tax matters.

HMRC provide a excellent guide on this subject, albeit some 89 pages long, take a look at page 33 and follow the flowchart to determine your Domicile.

In terms of the 3 years that you mention, my understand is that this is for UK inheritance tax. According to the HMRC website, after 3 years of living in a different country, you are no longer considered UK Domiciled for IHT purposes.

From link: Domicile links an individual to a territory subject to a single system of law. It does so for purposes that affect various personal aspects of an individual’s life and legal relationship with the society of that territory. These purposes include the validity of marriages, rights of succession to property and, in some countries, taxation.

So to answer you question, Domicile and Tax Resident are different things, but often work hand in hand.

Hope that helps
chc4me

Reylan

Hi chc4me

As usual, you have explained everything so that I can understand it. Thank you for this and page 33 is very useful. I will read the whole document, later.

Thanks once agan for your help.

Reylan