Question 1

What is non-domicile (non-dom) tax status in the UK?

Accepted Answer

Non-domicile status is a UK tax concept where individuals are UK resident for tax purposes but maintain their domicile of origin in another country. Domicile is a complex legal concept reflecting where someone considers their permanent home—typically where they were born or where their father was domiciled at birth. Non-doms enjoy significant tax advantages: they can choose the remittance basis of taxation, meaning foreign income and gains are only taxed in the UK if brought (remitted) into the UK. This allows substantial tax planning opportunities for internationally mobile individuals with global income sources. However, non-dom status has been significantly restricted in recent years. After 15 years of UK residence, you become "deemed domiciled" and lose remittance basis access. Long-term residents may also face deemed domicile for inheritance tax purposes after 15 of the last 20 years of UK residence. Planning before UK arrival is essential to maximize non-dom benefits and structure assets appropriately. [Contact us](/contact) to discuss your pre-arrival planning strategy.

Question 2

How do I qualify for non-domicile status?

Accepted Answer

Qualifying for non-dom status depends on your domicile position, which is primarily determined by where you (or your father at your birth) consider your permanent home. You don't choose non-dom status—you either have a non-UK domicile or you don't. Most people acquire their domicile of origin from their father at birth, which continues unless you acquire a domicile of choice elsewhere. Acquiring a domicile of choice requires demonstrating a permanent commitment to a new country with no intention to return permanently to your country of origin—extremely difficult to establish. If you were born outside the UK, particularly if your father was not UK-domiciled, you likely have a non-UK domicile. However, long-term UK residence (15+ years) triggers deemed domicile rules, eliminating non-dom benefits regardless of your actual domicile. Domicile assessment is highly fact-specific, requiring expert analysis of your family history, residence pattern, and intentions before claiming non-dom status. Email [PaulaPayen@parousia-accounting.com](mailto:PaulaPayen@parousia-accounting.com) for a comprehensive domicile assessment.

Question 3

What is deemed domicile and when does it apply?

Accepted Answer

Deemed domicile is a statutory rule treating long-term UK residents as UK-domiciled for tax purposes, even if their actual domicile remains non-UK. Two deemed domicile triggers exist: • For income tax and capital gains tax: you become deemed UK-domiciled after 15 years of UK tax residence in the last 20 tax years • For inheritance tax: you're deemed domiciled if you were UK resident in 15 of the 20 tax years immediately before the relevant tax year Once deemed domiciled, you lose remittance basis access and are taxed on your worldwide income and gains on the arising basis (same as UK domiciles). For inheritance tax, deemed domicile brings all your worldwide assets into the UK IHT net. Importantly, deemed domicile has a "tail"—if you leave the UK, it continues for several years after departure. The 15-year clock makes pre-arrival planning essential, particularly in years 10-14 when the window for effective planning narrows.

Question 4

What is the difference between remittance basis and arising basis?

Accepted Answer

The remittance basis and arising basis are two different methods of taxing foreign income and gains. Under the arising basis (standard for UK domiciles), you're taxed on all worldwide income and gains in the year they arise, regardless of whether you bring the money to the UK. Under the remittance basis (available to eligible non-doms), you're only taxed on foreign income and gains if and when you remit (bring) them to the UK—foreign income and gains kept offshore remain untaxed in the UK. The remittance basis becomes less attractive over time: • After 7 years of UK residence, you pay a £30,000 annual charge • After 12 years, £60,000 annually • After 15 years, deemed domicile applies and remittance basis becomes unavailable Remittance basis users also lose their UK personal allowance and capital gains tax annual exemption. Choosing remittance basis requires careful calculation: is the tax saved on foreign income greater than the charge plus lost allowances? This calculation differs for each individual annually.

Question 5

How should I structure my assets before arriving in the UK?

Accepted Answer

Pre-arrival asset structuring is the single most important tax planning opportunity for non-doms, because many planning options disappear once you're UK-resident. Key strategies include: • Realizing capital gains while still non-UK-resident (no UK tax applies to gains before arrival) • Restructuring investment portfolios to separate clean capital (pre-arrival wealth) from future income and gains • Establishing offshore trusts to shelter income and gains from UK tax (with significant restrictions) • Reorganizing corporate structures to minimize UK tax exposure • Timing income receipts to occur before UK arrival when possible UK tax law includes anti-avoidance provisions—temporary period of non-residence rules, transfer of assets abroad rules, and controlled foreign company provisions—which experienced advisors must navigate. The critical timing: structures must be established before you become UK tax-resident; retroactive planning is rarely possible. Many clients regret not engaging tax advisors 12-18 months before UK arrival. We recommend beginning planning 18-24 months before relocation for optimal results. [Schedule a consultation](/contact) or email [PaulaPayen@parousia-accounting.com](mailto:PaulaPayen@parousia-accounting.com) to start your pre-arrival planning today.

Question 6

What is the Statutory Residence Test?

Accepted Answer

The Statutory Residence Test (SRT) is the UK's complex legal framework determining whether you're UK tax resident in a given tax year. The SRT has three parts: • Automatic overseas tests (if you pass any, you're automatically non-UK-resident) • Automatic UK tests (if you pass any, you're automatically UK-resident) • Sufficient ties test (if neither automatic test applies, residence depends on your UK ties and days present) Key factors include: number of days spent in the UK (183+ days almost always means residence), available UK accommodation, substantive UK work, UK family presence, and whether you were UK-resident in previous years. The SRT's complexity creates planning opportunities—carefully managing UK days and ties can delay or avoid UK residence. However, aggressive positions risk HMRC challenge. Split year treatment is possible in arrival and departure years, reducing the tax year portion when you're UK-resident. SRT outcomes are highly fact-specific, requiring detailed day-counting and evidence gathering.

Question 7

Can I bring my foreign income to the UK tax-free?

Accepted Answer

This depends on the timing and nature of the income. Pre-arrival clean capital (wealth you accumulated before becoming UK-resident) can generally be remitted to the UK tax-free, provided you can prove it represents capital rather than income or gains. This is why pre-arrival structuring is essential—clearly separating clean capital from future income and gains. Once UK-resident on the remittance basis, remitting foreign income or gains triggers UK tax. However, strategic planning can minimize this: • Using clean capital for UK expenses while keeping income offshore • Establishing mixed fund accounts with careful ordering rules • Using offshore credit cards backed by offshore income (certain conditions apply) • Timing remittances for years when you're non-UK-resident or no longer using remittance basis Business investment relief provides limited remittance tax relief for qualifying business investments. The remittance rules are extraordinarily complex with severe penalties for errors—specialist advice is essential before moving money to the UK. Contact [PaulaPayen@parousia-accounting.com](mailto:PaulaPayen@parousia-accounting.com) for expert remittance planning guidance.

Question 8

What are the tax implications of US citizenship for UK tax planning?

Accepted Answer

US citizens face unique complications in UK tax planning due to the US's worldwide taxation system. Unlike most countries using residence-based taxation, the US taxes citizens' worldwide income regardless of residence. This creates double taxation issues: as a US citizen living in the UK, you're subject to both UK and US taxation on your worldwide income. The UK-US tax treaty provides relief through foreign tax credits, but timing mismatches and structural differences create friction. US citizens cannot benefit from many standard UK tax planning structures—offshore trusts are particularly problematic as US grantor trust rules may cause immediate US taxation while UK provides deferral. PFICs (Passive Foreign Investment Companies) create punitive US taxation for non-US collective investments. Required US tax reporting includes: • FBAR (Foreign Bank Account Reports) • FATCA reporting • Form 8938 (Statement of Specified Foreign Financial Assets) These are complex and strictly enforced with severe penalties. Effective planning requires coordinated US and UK tax expertise—seemingly obvious UK strategies often trigger unexpected US tax consequences. We work with US tax specialists to provide integrated advice. Email [PaulaPayen@parousia-accounting.com](mailto:PaulaPayen@parousia-accounting.com) for US-UK coordinated tax planning.

Question 9

When should I start planning my UK immigration tax strategy?

Accepted Answer

Begin planning 18-24 months before your planned UK arrival date for optimal results. This timeline allows sufficient time for: • Comprehensive asset and income analysis • Corporate restructuring if needed (often 6-12 months) • Establishing and funding offshore structures (3-6 months with proper due diligence) • Capital gains realization while non-UK-resident • Income timing strategies • Domicile assessment and documentation Many planning opportunities have strict timing requirements—for example, certain trust structures must be established while you're non-UK-domiciled and non-UK-resident, requiring completion before you relocate. Rushed planning increases error risk and limits available strategies. If you're already UK-resident, some opportunities remain but many are foreclosed—still seek advice immediately. Even clients several years into UK residence benefit from planning for future years, deemed domicile mitigation, and eventual departure planning. The worst approach is arriving in the UK with no planning and realizing years later that simple pre-arrival steps would have saved substantial tax. [Schedule a consultation](/contact) today to start your planning.

Question 10

How can Parousia help with immigration tax planning?

Accepted Answer

Parousia has 38 years of experience advising high-net-worth individuals and families on UK immigration tax planning. Our comprehensive service includes: • Detailed domicile assessment with supporting documentation • Statutory Residence Test analysis and day-counting strategies • Remittance basis versus arising basis calculations for each tax year • Pre-arrival asset restructuring advice • Offshore trust establishment and ongoing administration • Worldwide tax position analysis • US-UK coordination for American clients • UK tax return preparation for non-doms • HMRC enquiry defence if planning is challenged We take a long-term approach—planning for your entire UK residence period and eventual departure, not just the first year. Our clients typically include: • Executives on international assignments • Entrepreneurs relocating to the UK • Family offices managing global wealth • Individuals seeking UK residence for family or lifestyle reasons We coordinate with your existing advisors—overseas accountants, lawyers, and investment managers—ensuring seamless integrated advice across all jurisdictions. [Contact us](/contact) or email [PaulaPayen@parousia-accounting.com](mailto:PaulaPayen@parousia-accounting.com) to discuss your immigration tax planning needs.

Immigration
Tax Planning

Residency & Domicile Planning

Wealth Structuring

Compliance Management

International Coordination

Planning Your UK Arrival?