UK resident status
 To be regarded as resident in the UK you must normally be physically present in the country for 183 days or more in the tax year.
UK non resident status
If you leave the UK to work full-time abroad under a contract of employment, you are treated as non resident and not ordinarily resident if you meet all the following conditions:
Your absence from the UK and your employment abroad both last for at least a whole tax year.
During your absence any visits you make to the UK total less than 183 days in any tax year, and average less than 91 days a tax year. (The average is taken over the period of absence up to a maximum of four years. Any days spent in the UK because of exceptional circumstances beyond your control, for example the illness of yourself or a member of your immediate family, are not normally counted for this purpose).
Ordinarily resident
If you are resident in the UK year after year, you are treated as ordinarily resident here. You may be resident but not ordinarily resident in the UK for a tax year if, for example, you normally live outside the UK but are in this country for 183 days or more in the year.
Or you may be ordinarily resident but not resident for a tax year if, for example, you usually live in the UK but have gone abroad for a long holiday and do not set foot in the UK during that year.
Non domiciled
You are non domiciled in the country where you have your permanent home.
Domicile is distinct from nationality or residence.
You can only have one domicile at any given time.
You normally acquire a non domicile of origin from your father when you are born.
It need not be the country in which you are born.
For example, if you are born in France while your father is working there, but his permanent home is in the UK, your non domicile of origin is in the UK.
Domiciled
You are domiciled in the country where you have your permanent home.
Domicile is distinct from nationality or residence.
You can only have one domicile at any given time.
You normally acquire a domicile of origin from your father when you are born.
It need not be the country in which you are born.
For example, if you are born in France while your father is working there, but his permanent home is in the UK, your domicile of origin is in the UK.
Acquired domicile
To acquire a domicile of choice, the following factors would suppose an individual’s claim for domicile in a particular country:
Establishing a permanent home in that country
Gaining citizenship, nationality or ’permanent residence rights’ there
Working there
Having children educated there
Living there with spouse/partner
Have bank accounts and investments there
The exercise of local voting rights
Making local funeral arrangements
Disposing of assets in the country they have previously been domiciled in
Although domicile is a function of physical presence and intent, it is often only after death that it falls to be established, so that intent has to be inferred from the actions taken by a deceased during this lifetime.
Definition of domiciliary
An individual who is domiciled in a particular state or country is a domicilary of that state or country.
Off shore
W Coleman & Co was established in 2000 with the aim of providing a highly efficient private and structured financial service to private clients, companies and trusts acquiring either residential or commercial property.
This extends to shipping and aviation upon request.
The role of the business is to act as brokers for the purpose of sourcing the right funding facility to suit the individual requirements of that client.
Historically close associations with a number of key and major lending institutions enable W Coleman & Co to negotiate specific terms on behalf of its clients.
A typical client profile would be an individual who is non-UK resident for tax purposes or non-domiciled in the UK.
The net worth may be in excess of £20 million and whose business affairs would generally transact through an offshore structure.
Often therefore the borrowing entity would be a ‘single purpose vehicle’ registered offshore with or without the personal guarantee of the beneficial owner.
Mitigating circumstances
At W. Coleman & Co we listen closely to our clients circumstances to ensure that there is the appropriate clarity when structuring finance for a property acquisition or refinancing/raising capital against an existing property.
The following is a list of typical circumstances that a client may require to mitigate which are simply highlighted as examples, we are not qualified to advise our clients on considerations relating to tax and would refer to the appropriate professional body when identifying a need.
Capital liquidity - One may not wish to inject so much of their capital into the acquisition of a property, alternatively the capital may be invested and achieving a more aggressive rate of return than the interest rate payable on finance.
Inheritance tax - Often our clients will be both Non-Uk Resident for tax and Non-Domicilied and may be advantaged in being able to hold assets via an offshore vehicle, namely a single purpose limited liability company supported by a trust/holding entity. Our role is to ensure that the recommended lending institution understands clearly the structure of ownership and what tax risk the client is trying to alleviate. In doing so we therefore provide suitable information and guidance for the lender to underwrite both their credit and compliance risk.
Offshoring - The client may prefer to service the repayment of interest only from money sitting offshore, the loan therefore may be physically sighted offshore. An additional factor may be to cross charge the debt against other offshore collateral to increase the leverage of debt or simply to reduce the interest cost by securing against e.g cash deposit that ordinarilly if brought onshore may be subject to tax
In all instances where tax comes in to play, professional advice should be sought. |
