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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Domicile: Introduction and Background: The relevance of domicile for UK tax purposes

There are several ways in which your domicile can affect your liability to tax in the UK, including those listed below:

  • Ability to use the remittance basis in respect of the following sources of foreign income and gains RDRM30005 

    • Employment income
    • Relevant foreign income
    • Capital gains
    • The application of the anti-avoidance legislation relating to the transfer of assets abroad. (Part 13, Chapter 2 ITA 2007).
    • The apportionment of capital gains to shareholders in non-resident companies, if the shareholders are remittance basis users after 5 April 2008, and to the settlors and beneficiaries of non-resident trusts. (Sections 13, 86, 86A and 87 TCGA 1992).
    • The Inheritance Tax liability on assets situated outside the UK. Such liability can arise either when there is a transfer on death or in the event of a lifetime transfer. In the latter case the transfer is chargeable when it is made. The availability of the spouse or civil partner exemption can also be affected. (Sections 6, 18(2) and 48(3)(a) IHTA 1984).
    • The availability of a deduction for certain travel costs and expenses in respect of which amounts have been included in earnings from an employment for duties performed in the UK. (Sections 373 and 374 ITEPA 2003).