Residence and Domicile

Chlosmythx

I am sitting the personal tax exam on Thursday and I have been trying to get my head around the concept of residence and domicile but with no luck!

I know in the last sitting of my exam the first question had been purely based on the concepts of the two factors and how it effects your tax liability.

Can anyone shine a light on this?

Thanks in advance ☺️

badhombre

generally your domicile is fixed by virtue of either or both (a) your country of birth (b) your father's place of birth (whereupon you will assume the domicile of your father irrespective of where you live until the age of 16 upon which you can voluntarily elect to change your domicile). So if your father was born in Jamaica but is now a UK resident then you could as a minor be classified as a Jamaican domicile - if older than 16 or if your "centre of vital interests" is the UK then you'd be UK domiciled. This one is more flexible and harder to pin down. Residence is simpler - if you are considered a domiciled individual or not - generally once you've spent more than X days in the UK within a tax year you'd be considered a resident (tax perspective) and thus liable to tax in the UK on your UK and worldwide sourced income. A good place to look is under the RDR3 section on the HMRC website for a full and detailed explanation on how one can be deemed a resident or not irrespective of their domicile. My experience (not AAT but ATT) is that domicile is normally brought in to determine if a UK born and ordinarily resident individual is entitled to the full UK personal allowance on their UK and non-UK sourced income .... https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf