Booth and Schwarz: Residence, Domicile and UK Taxation:.

This title gives the reader authoritative guidance on the legislation dealing with residence, principally the Statutory Residence Test which defines for tax purposes whether or not an individual is resident in the United Kingdom. The author, Jonathan Schwarz, is a Barrister at Temple Tax Chambers in London and is also a South African Advocate and a Canadian Barrister. His practice focuses on international tax disputes as counsel and as an expert and advises on solving cross-border tax problems. While the Statutory Residence Test has been in place since 2013, there are several important developments driving this updated edition as follows:A new chapter reflecting new legislation bringing in higher rates of SDLT payable by non-UK-resident purchasers from 1 April 2021.Overall change in the UK taxation as it relates to residents and non-residents, and the general codification of this area of the law.Updated commentary in line with the OECD multilateral instrument on BEPS and residence for tax treatiesNew commentary on the operation of the Statutory Residence Test in light of COVID-19 Commentary on a number of important new cases:HMRC v Embiricos [2020] UKUT on disputes over residence and domicileHenkes v HMRC [2020] UKFTT information demands re residence and domicileMackay v HMRC [2020] UK FTT re ordinary residenceThe Appellant v The Revenue Commissioners 25 TACD 2019 (spliy year residence)P Panayi Accumulation and Maintenance Trusts v HMRC [2019] UKFTT (trust migration) Preface Contents Table of Statutes Table of Statutory Instruments Table of HMRC Material Table of EC Materials and International Conventions Table of Cases Abbreviations Chapter 1 United Kingdom taxation 1.01 State practice in exercising taxing jurisdiction QUESTIONS OF SOVEREIGNTY 1.02 The right to levy tax 1.03 Jurisdictional limitations 1.04 Enforcement overseas 1.05 Territorial limits QUESTIONS OF TERRITORY 1.06 Territory of the UK 1.07 The territorial waters 1.08 Territorial extension 1.09 The European Union and Brexit DETERMINANTS OF CHARGEABILITY 1.10 Residence 1.11 Ordinary residence 1.12 Domicile 1.13 Nationality 1.14 Personal connection and UK source income 1.15 The remittance basis 1.16 Attempts to narrow the remittance system 1.17 Reform of residence rules 1.18 Criticisms of the system 1.19 Remittance basis amendments 1.20 Codification of the residence of individuals UK REVENUE LAW 1.21 Income tax 1.22 Corporation tax 1.23 Capital gains tax 1.24 Inheritance tax 1.25 National Insurance Contributions 1.26 Value added tax (VAT) HMRC PRACTICES AND CONCESSIONS 1.27 Individual residence 1.28 Withdrawal of IR20 1.29 Guidance and the statutory residence test Chapter 2 Residence of individuals: the Statutory Residence Test 2.01 Introduction THE STATUTORY RESIDENCE TEST 2.02 Basic rule 2.03 Physical presence: counting days 2.04 Day-count hyping 2.05 Counting days: conclusive non-residence 2.06 Counting days: conclusive residence 2.07 UK home: conclusive residence 2.08 What is a home? WORK 2.09 Introduction 2.10 What is work? 2.11 Location of work 2.12 Full-time work 2.13 Full-time work overseas: conclusive non-residence 2.14 Full-time work in the UK: conclusive residence 2.15 International transportation workers 2.16 Death: conclusive non-residence 2.17 Death: conclusive residence 2.18 The sufficient ties test: other connecting factorsand day counting 2.19 Family tie 2.20 Accommodation tie 2.21 Work tie 2.22 90-day tie 2.23 Country tie 2.24 The sufficient ties test: day counting for former non-residents 2.25 The sufficient ties test: day counting for formerresidents 2.26 The sufficient ties test: day counting in the year of death 2.27 Residence of MPs and members of the House of Lords 2.28 EU officials 2.29 An annual attribute SPLIT-YEAR TREATMENT 2.30 Introduction 2.31 The effect of a split year 2.32 Which split-year case applies? 2.33 Case 1: Starting full-time work overseas 2.34 Case 2: Spouse or partner of someone starting full-time work overseas 2.35 Case 3: Ceasing to have a home in the UK 2.36 Case 4: Starting to have a home in the UK only 2.37 Case 5: Starting full-time work in the UK 2.38 Case 6: Ceasing full-time work overseas 2.39 Case 7: The partner of someone ceasing full-time work overseas 2.40 Case 8: Starting to have a home in the UK 2.41 Dual residence 2.42 Temporary non-residence 2.43 Commencement and transitional rules 2.44 Scottish and Welsh taxpayers 2.45 Residence for tax treaty purposes Chapter 3 Residence of individuals: case law test 3.01 Introduction THE NATURE OF RESIDENCE 3.02 A qualitative attribute 3.03 A question of fact and degree 3.04 A personal attribute 3.05 An annual attribute 3.06 The judicial principles 3.07 The Shepherd/Grace syntheses A PLACE OF ABODE 3.08 Occupation of a dwelling house 3.09 Ownership irrelevant PHYSICAL PRESENCE 3.10 Duration of presence 3.11 Regularity and frequency of visits 3.12 Revenue practice 3.13 Future conduct 3.14 Previous history CONNECTING FACTORS 3.15 The ties of birth 3.16 The ties of family 3.17 The ties of business 3.18 Other ties INTENT AND LEGALITY 3.19 Involuntary or unintentional presence 3.20 Unlawful presence 3.21 Dual and multiple residence Chapter 4 Ordinary residence 4.01 Introduction CONCEPT AND APPLICATION 4.02 The meaning of ordinary residence 4.02A The Genovese/Arthur syntheses 4.03 The relation of residence to ordinary residence ESSENTIAL ELEMENTS 4.04 A voluntarily adopted place of abode 4.05 Settled purposes 4.06 Regular order of life 4.07 Unlawful residence 4.08 Dual or no ordinary residence REVENUE PRACTICE 4.09 IR20 4.10 HMRC6 4.11 National Insurance Contributions 4.12 Abolition of ordinary residence for income tax and capital gains tax: transitional measures Chapter 5 Individuals coming to and departing from the UK 5.01 Introduction 5.02 Split tax years 5.03 Income Tax Act 2007 INDIVIDUALS COMING TO THE UK 5.04 Deemed residence or non-residence 5.05 Temporary purpose 5.06 View or intent of establishing residence 5.07 Available accommodation 5.08 Actual presence 5.09 Determining presence 5.10 The significance of ‘the tax year’ 5.11 The capital gains tax test 5.12 HMRC Guidance on coming to the UK INDIVIDUALS LEAVING THE UK 5.13 Residence of individuals temporarily abroad 5.14 Occasional residence 5.15 A distinct break 5.16 Residence of individuals working abroad 5.17 Full-time work 5.18 Trades and professions 5.19 Employment 5.20 Incidental duties 5.21 HMRC Guidance on departing from the UK Chapter 6 Residence of trusts and estates 6.01 Introduction TRUSTS 6.02 Residence 6.03 Single residence trustees 6.04 Mixed residence trustees 6.05 Non-resident trustees with a UK permanent establishment 6.06 Individual trustees with split-year treatment 6.07 Residence for tax treaties 6.08 Residence of estates Chapter 7 Residence of companies 7.01 Introduction 7.02 UK incorporated companies 7.03 Residence under case law 7.04 The Untelrab/Development Securities syntheses 7.05 A question of fact 7.06 Who exercises central management and control? 7.07 Delegated management and control 7.08 Shareholder control 7.09 Elements of central management and control 7.10 Finance as a key element 7.11 Degree of activity 7.12 Administrative functions 7.13 Influence compared with management and control 7.14 Location of central management and control 7.15 Dual or multiple residence 7.16 Residence for tax treaty purposes 7.17 Transfer of residence abroad 7.18 Treaty non-resident companies 7.19 European Companies 7.20 Residence for special statutory purposes 7.21 Group relief 7.22 Controlled Foreign Companies 7.23 Transfer pricing – exemption for small or medium-sized enterprises 7.24 Foreign dividends received by small companies 7.25 Company liquidations and business cessations Chapter 8 Residence of partnerships 8.01 Introduction 8.02 Control and management Chapter 9 Domicile 9.01 Introduction THE NATURE OF DOMICILE 9.02 Historical background 9.03 The two roles of domicile 9.04 The five principles of domicile DOMICILE OF ORIGIN 9.05 Acquisition 9.06 Displacement and revival DOMICILE OF DEPENDENCE 9.07 Married women 9.08 Children 9.09 Persons suffering from mental disorder DOMICILE OF CHOICE 9.10 Acquisition 9.11 Residence 9.12 Intention 9.13 Motive as evidence of intention 9.14 Proof of intention 9.15 Change of domicile of choice 9.16 Deemed domicile to 5 April 2017 9.17 Deemed domicile from 6 April 2017 9.18 Elective UK domicile for spouses and civil partners 9.19 Domicile for tax treaty purposes Chapter 10 Residence for stamp duty land tax 10.01 SDLT surcharge on non-UK residents purchasing residential property 10.02 SDLT: residence of individuals – basic rule 10.03 Crown employment 10.04 SDLT: residence of individuals – modified basic rule 10.05 SDLT: residence of companies – basic rule 10.06 SDLT: residence of companies – UK resident close companies 10.07 SDLT: collective investment vehicles 10.08 SDLT: trusts, settlements and similar arrangements 10.09 Bare trusts 10.10 Life interest and interest in possession trusts 10.11 Alternative property finance 10.12 Unit trusts 10.13 SDLT: compliance with non-resident surcharge 10.14 Record keeping for individuals Chapter 11 Compliance and appeals 11.01 Introduction 11.02 Assessment of non-residents 11.03 Deduction of tax at source – ‘usual place of abode’ 11.04 Claiming non-resident, treaty non-residentor non-domiciled status 11.05 Administration of residence and domicile statusof individuals 11.06 Inheritance tax accounts 11.07 Domicile enquiries 11.08 ITEPA 2003 s 690 directions 11.09 Certificates of residence 11.10 Appeals 11.11 Evidential burden on appeal 11.12 Discovery assessments 11.13 Requirement to correct historic offshore non-compliance 11.14 Judicial review 11.15 Role of Upper Tribunal or Court of Appeal Index