J.J

Hello,
This is a question to those UKC's with repatriation knowledge.

Domicile status is complex but is normally based in law on the country where a person has their permanent home.
People born in UK of father born in UK are domiciled by origin. But UKC adults outside UK can choose to be domiciled elsewhere.

So here's my question (finally) Have any repats that have lived outside of UK, for a lengthy period of time, become citizens of foreign country, moved back to UK and become residents (as you would) but have maintained a Domicile other than UK?

(why would you, you might ask - well non-domiciled do not get taxed by HMRC on income from outside UK, so presumably if I had pension from US, Capital gains or dividends then HMRC would not seek tax on this income.)

This is in my 'leave no stone unturned philosophy' for returning to UK after 18 yrs in US, born UKC, naturalised USC. Maybe I think too deeply but I can't help it and I got time on hands before we repatriate in 2010.

Thanks for your insights.

GagainPEI

If you intend to re-patriate, then I don't know why you would be non-domiciled. You would certainly need to show that you have very strong ties to the US and your future intentions & plans to return are fixed & in place.

Incidentally, the last Budget introduced plans to tax non-Domiciles. I didn't study the details but the HMRC website will have more information.

Jerseygirl

I was told if you spend more than 90 days or 3 months (can't remember which) in the UK in a year...you are classed as a UK resident in the eyes of the Inland Revenue and are required to pay UK income tax.

GagainPEI

That is the rule for deciding an individual's Residence status. Residence & Domicile are completely different concepts. Not something to get into on this forum.

Bijilo123

This explains it all. You are better off being domiciled in the uk as well as resident and ordinarily resident and you have transferred all of your funds to the UK and can show that they originated from taxed income.


http://www.hmrc.gov.uk/cnr/hmrc6.pdf

J.J

Thanks for your input and yes, that is correct when deciding residence status for tax as GagainPEI says, and Domicile is indeed a different horse in the race.

Your comment though, Jerseygirl, stimulates another question;
re: the Residency rule and if I go back and stay for the allowed period + 1 day and therefore I default to a UK taxpayer, do I pay tax only for the extra 1 day or does my Tax start date defer back to the date I entered the UK? (somehow I can't see that I could get a (90 day) tax holiday).
Does anyone have experience of this ?

J.J

Thanks Bijilo123
a) the hmrc6 does seems to explain it all in clear language + it's always good to learn what others refer to.

I have empathy with your insight of just getting it all back to UK as a regular Brit , it would certainly seem simpler than trying to maintain the stuff outside the UK.

Bijilo123

I don't know what you mean - you need to be clearer.

Quite frankly you seem to be making a big deal over something that is not as big as you fear and are trying to go through loops to avoid what in all likelyhood is a small amount of tax. As far as I can see you are only likely to be liable for CGT on your UK home and possibly tax on your ISA - which you should not have had if you were living in the US. If you have not paid rental income - which you may be liable for then you should do so but your tax free allowance and other allowances will reduce this for the entire period you were renting it (unless you were non domiciled).

Your CGT will be mitigated by allowances and indexation which is why I am not fearful of the amount - and you should pay it if the rukes say so.

Please take other suggstion and forget this domicile issue - it is very dangerous if you go this route even though you are unlikely to succeed. You can run the risk of being charged either a flat £30k per annum tx - irrespective of how much or little you have earned or pay tax on every cent you bring back to the UK. You would not have any issues with bringing in money back from the US otherwise.

I imagine that this is a confusing process for you and onw which worries you. I think also that you may be under the impression that there are loopholes which can help you. My view is that you have little to worry about and that you should sit down, think about what questions you have and pay someone - a licensed UK tax adviser - to answer them

Happy Xmas

Bijilo123

Dont' even think about this if you are going to be resident and ordinarily resident in the UK. If you have honestly earned 'stuff' outside the UK then you wil in the end have nothing to worry about but why risk an HMRC investigation into all of your affairs by not being transparent.

J.J

Did I allude that I am not being transparent, , darn must be my accent.

J.J

..... nor am I trying to deliberately avoid tax or or find loopholes or whatever my readers may infer, it is simpler this; by fact of living outside the UK for a lengthy period would I / could I (if I wanted to and I'm not saying I want to)be domiciled outside UK if I returned to UK??

GagainPEI

Having read of your plans in the Welcome forum, there can be no doubt that you will be Domiciled in the UK when you take up residence again.

J.J

Thanks for clarifying Gagain, that is clear and I am happy with the outcome and to know where I stand.