Taxation: domicile and residence


Two entirely separate concepts are relevant when deciding if you are liable to pay UK tax: domicile and residence. “Residence” relates to the periods of time you spend in a country, while your “domicile” is the country you would regard as “home”.

If you are resident in the UK you will, in principle, be liable to pay UK income and capital gains tax on your worldwide income and gains. If you are domiciled in the UK you are, in principle, liable to pay UK inheritance tax on your worldwide assets.

It is possible to be tax-resident in more than one place at a time. If, say, you spend six months of the year in the UK and the other six months in Spain, you will be tax-resident in both countries. There are agreements in place between most countries to make sure that this does not mean you are taxed twice.

Getting to grips with your tax situation if you live and work overseas can be complex. We can tell you how your residence and domicile status impacts how much tax you pay, including capital gains tax and inheritance tax.

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