HOTCHKISS ASSOCIATES

Bespoke UK and International Tax Advice and Compliance Services

Contact Us

Domicile

Many people do not understand the concept of domicile.  Most people assume it is similar (if not identical) to tax residence: this is not the case.

There are different forms of domicile:

(a) Domicile or origin;
(b) Domicile of choice; and
(c) Domicile of dependence.

In addition, a statutory definition exists for inheritance tax purposes, which is based on an individual’s residence status.
It is critical to understand your domicile as it is fundamental in determining your liability to inheritance tax.  In addition, the UK tax system has introduced particular income and capital gains tax advantages to those individuals who are UK resident but non-UK domiciled.

How can we assist?

We can assist by:

- helping you understand your domicile as a matter of common law and statute;
- assisting you in determining whether your domicile has changes and the steps you need to take to achieve this; and
- advising you on the consequences of your domicile status.

Residence

Tax residence is key:  if you know your status you can begin to understand how you will be taxed.  If you are moving between countries, you need to make sure you cease residence effectively or indeed commence residence at the right time.

How can we assist?

We can assist by:

-  helping you identify your residence status;
-  determining the steps you need to take to cease or resume residence (as well as making sure you take the appropriate steps to make a change of residence and adhere to any reporting requirements);
-  identifying the most appropriate country in which to become residence, based on your personal and lifestyle choice;
-  explaining the steps you need to take to remain non-UK resident in changing circumstances; and
-  informing you of the records that you will need to keep, evidencing your status.

The Returning Expatriate

You may have decided to return to live in the UK.  What should you be considering?

(a)  Can you trigger disposal of assets or crystallise income before you become resident?
(b)  Are there steps you need to take to make sure you obtain the split year treatment for UK residence purposes?
(c)  Are you coming back at the right time or will a delay assist in mitigating your tax liabilities?
(d)  What should you do about income or disposal proceeds received after you are UK resident, which relate to a period of non-UK residence?
(e)  Have you effectively ceased residence in the country you are departing from and completed all formalities?
(f)  What do you need to do with any businesses you have established outside the UK?
(g)  What about domicile - will your resumption of residence impact your estate planning?
(h)  What are your reporting requirements in the UK (and overseas)?

These are just a few matters that you should be considering before you return to the UK.

How can we assist?

-  Considering the assets you hold,
-  identifying your income streams;
-  determining your residence and domicile status; and
-  providing advice and assisting you to establish a plan so your transition back to the UK takes place tax-effectively.

Trusts

Our team can assist you with a variety of trust matters, including:

-  Using trusts
      •Tax planning
      •Asset protection
      •Succession planning

-  Trust management
      •Choosing trustees
      •Drafting

-  Taxation of settlors and beneficiaries
      •Disclosure
      •Income tax
      •Inheritance tax
      •Capital gains tax

To find out more, please contact us

Employment Related Matters

With our experience, the team at Hotchkiss Associates Limited can assist you with a variety of employment related tax matters:

-  Employment benefit trusts;
-  Remuneration structures;
-  Incentive arrangements; and
-  General taxation.

For a confidential discussion, please contact us.

Taxation as a non-UK resident

Even if you have left the UK, you may still be liable to many UK taxes.  UK tax liabilities can arise:

(a)  In a year in which the tax year is split into resident and non-resident periods;
(b)  whilst non-resident generally; or
(c)  in any year in which UK residence is resumed.

Much depends on the nature of the income arising, ie rents, interest, royalties, dividends or general trading income, or on capital gains.

In addition, many non-UK residents may still be within the scope of inheritance tax, either indefinitely or at the every least, for a number of years after they have ceased residence.

How can we assist?
We can assist by:

-  determining your residence and domicile status so you can minimise your UK tax liabilities as a non-UK resident;
-  analysing your income streams; and
-  determining how assets are held and how best to hold them given your circumstances.

General Residence Matters

There may be a number of circumstances that dictate whether you decide to leave or return to the UK.  For example:

(a)  You may be a long term expatriate and wish to return home to retire;
(b)  your overseas employment may have come to an end;
(c)  you may have sold your business and wish to leave the UK to enjoy your retirement in a lower tax environment;
(d)  you may have a start-up business and wish to establish it overseas; or
(e)  you may simply wish to leave the UK for lifestyle reasons.

Whatever your reason, tax will or should play a part in your decision making process.

Some of the areas you will need to think about include:

Residence  How do you cease residence?
Domicile     What is your domicile and how can you change it?
Emigration and your business  What to do about your UK business and what effect does your domicile have?
Taxation of non-UK residents  How you will be taxed in the UK as a non-UK resident?
Returning expatriate  What to do on or prior to your return to the UK?