ASIA ADVISORY SERVICES GROUP | BDO PRIVATE CLIENT SERVICES 04
HOWWE CAN HELP ARRIVING OR LEAVING
MOVING FROM ASIA?
LEAVING THE UK?
ARE YOU THINKINGOF COMING TOTHE UK, OR LEAVING THE UK? Whether you are moving country for work or lifestyle, acquiring or breaking UK tax residence effectively is crucial to prevent being resident in two countries and incurring unnecessary compliance and tax costs. We can provide the appropriate joined up advice and take care of all tax reporting and residence issues in the target country. Wealth planning undertaken historically in one jurisdiction should be reviewed well in advance as it may not always be appropriate in a second jurisdiction.
THE STATUTORY RESIDENCE TEST UK tax residence is defined by the statutory residence test (SRT). The SRT, while complex, provides some certainty as to when an individual becomes UK resident for UK tax purposes. Each individual’s position (e.g. each spouse) must be looked at based on their personal circumstances so detailed records must be kept to support any residence position. The SRT comprises three parts: an automatic non-resident test, an automatic resident test and a sufficient ties test. The tests should be considered in that order but as soon as the conditions of one test are met, the other tests do not need to be considered. Split year treatment Residence status is determined for tax years of departure and arrival. However, if the individual’s circumstances fit one of the cases for split year treatment to apply then the tax year of departure will be split into a resident period and a non-resident period. These rules are complex so personal advice based on your circumstances is required.
NON-UK DOMICILES AND THE REMITTANCE BASIS OF TAXATION
For individuals moving to the UK, the non-UK domicile ‘remittance basis’ regime can mean no UK tax on non-UK income and capital gains for the first 15 tax years of UK residency providing these amounts are not remitted (i.e. not brought to or used) to the UK. There is also the possibility of no inheritance tax on non-UK assets for the first 15 tax years of UK residency. There are tax incentives for investment in UK businesses. Pre-arrival restructuring should be considered when you are moving to a new country. This could include a review of current asset and investment holding structures and re-structured, to retain greater flexibility over assets and their exposure to UK tax. Non-UK bank accounts may be reorganised before arrival in the UK to maintain maximise flexibility in relation to future remittances to the UK so that they are tax efficient. It is important to plan ahead and seek early advice to provide sufficient time to implement any planning and take appropriate action. We will work with you, your family and other advisers to ensure that assets and affairs are structured in a prudent and tax-efficient way, taking into account personal circumstances and intentions for the future.
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