By Rosie Chalmers, ACCA, Head of Finance of Oracle Capital Group
1. Your tax status is dependent on a number of different factors – not just your residency
When you immigrate to the UK your UK tax status will depend on a number of factors. These include your residency and domicile status, but also where your assets are located and your source(s) of income.
2. There are three main types of UK taxes
There are three types of tax that UK residents are liable to pay:
• UK Income Tax (IT) on worldwide income
• UK Capital Gains Tax (CGT) on worldwide assets
• UK Inheritance Tax (IHT) on worldwide assets
Unlike many other tax jurisdictions overseas, taxes in the UK are strictly enforced and you will be expected to have an understanding of, and cooperate fully with, your tax obligations as an immigrant/individual with assets/income in the UK.
3. UK income is always subject to UK income tax
This is true regardless of your residency and domicile status. If you are based outside the UK, your UK assets are not liable for Capital Gains Tax, but they will always be subject to UK Inheritance Tax, regardless of your domicile status.
4. You might have to pay UK Inheritance Tax on your foreign assets
All UK assets are always subject to UK Inheritance Tax, regardless of your domicile status. However, when it comes to your foreign assets, these are only liable to UK Inheritance Tax if you are either UK domiciled (or “deemed” UK domiciled). If you come to live in the UK with the intention of returning to your home country in due course, you are likely to remain UK non-domiciled. However, once you have been in the UK for 17 out the previous 20 years, you are “deemed domiciled” for UK IHT purposes.
5. You could benefit from double taxation treaties
The UK has different longstanding tax relationships with other countries to reduce or eliminate double taxation for UK immigrants or individuals with assets or earnings abroad.
The UK has different Double Taxation treaties with over 100 countries. It is important that you are aware of the standing agreement with your country of origin as you may benefit from double tax treaty or double tax relief on Income Tax, Capital Gains Tax or Inheritance Tax.
It is important that you are aware of the standing agreement with your country of origin as you may benefit from double tax treaty or double tax relief on Income Tax, Capital Gains Tax or Inheritance Tax.
If you are planning to immigrate to the UK you can find out more information on the taxes you might face through the HM Revenue and Customs website www.hmrc.gov.uk/international/residence.htm
