Tax Residency & Domicile

In tax terms, residence is the country where you spend the most time, whilst domicile is the country you’d describe as your permanent home, even if you don’t live there. Domicile is mostly determined by your family background (particularly your father), although the definition is complex. 

UK resident and domiciled 

If you’re resident and domiciled in the UK, you’ll pay UK tax on all your income, wherever you earn it, and on your gains. However, different tax rules will apply to your UK income and foreign income and gains. UK Inheritance tax will be due on all your worldwide estate. 

Non-UK resident but domiciled in the UK 

You’ll be taxed on your UK income and some UK gains, but not on your foreign income or gains. UK Inheritance tax will be due on all your worldwide estate. 

Non-UK domicile but resident in the UK

You’ll be taxed on your UK income and gains, and on foreign income and gains if they’re remitted to the UK. But you can claim not to pay UK tax on your foreign income and gains if they’re remitted elsewhere. Inheritance tax will only be due on your UK estate. 

Non-UK resident and not domiciled in the UK 

You’ll be taxed on your UK income and some UK gains, but not on your foreign income or gains. UK Inheritance Tax will only be due on your UK estate. 

The remittance basis is an alternative tax treatment available to individuals who are resident but not domiciled in the UK and have foreign income and gains. Remittance basis is not available if you are deemed domicile in the UK.  

Using the remittance basis means you pay UK tax on UK income and gains for the relevant tax year, but you’re only liable to pay UK tax on foreign income and foreign gains that you bring or remit to the UK. Again, the rules are complicated, but the remittance basis is useful as it can help you avoid paying tax twice on the same income and gains. 

We can advise on how this affects you, and suggest other ways to mitigate tax, such as gaining tax relief by using remittances to invest in a UK business. 

Get remittance advice from our team

Despite all this complexity, you can relax and have confidence in our advice. We’ll support you with the combined knowledge and skills of our expert tax specialists here in the UK, but also our counterparts across the world. 

We are members of Accelerate, a Business Associate of Crowe Global and of The International Accounting Group. As part of these powerful networks, we have strong and dependable contacts with numerous trusted partners, so we can offer you access to further global specialists with international expertise, in hundreds of countries. 

Whilst this wealth of global knowledge is invaluable, we understand you won’t want to contact several different people to get advice. At AAB, we’ll project manage your international tax affairs, collaborating with our worldwide colleagues to deliver seamless tax efficiency and compliance advice. You can trust us to be your single, reassuring and responsive point of contact. 

Speak to our private client team