Foreign Income for Non-domiciled' residents

hi hmrc admin, I have interest income of 2500 in a given tax year and I don't plan to bring this money back to UK. I am currently residing in uk for last 16 years and working full time and paying UK tax on all UK income. I am on 40% tax rate. I was born in India and my parents are born in India, I plan to retire and live back in India after my retirement, does this mean I am a non-domiciled resident? if I am a non-domiciled resident and have 2500 interest income in a tax year, does this mean that upto 2000 i don't pay any tax and I pay 40%tax on remainder 500? OR since my foreign income is more than 2000, I pay 40% tax on all 2500 income? can you help me with above questions please? thank you

Hi nnectiondue,

As you have been in the UK for 16 years you are not classed as non domiciled.

You therefore pay tax on all your worldwide income.

See guidance here: 

Deemed Domicile rules

Thank you. 


 

Hello dear - thank you for the response My wife is in similar situation but has only been In the uk for 10 years, can you clarify the questions raised in my initial query for her please ?

Hi connectiondue,

If your wife is resident in the UK, but not domiciled, then any foreign income not remitted to the UK is not taxable.  

If that income is remitted to the UK in a future tax year, then it will be taxable in that tax year.

Helpsheet HS264 gives advice on the remittance basis:

Remittance basis 2022 (HS264)
 
There is also some guidance at:

Residence, domicile and the remittance basis: RDR1

An individual is deemed domiciled in the UK, if they are resident in the UK for at least 15 of the last 20 years immediately before the relevant tax year. 

When resident and domiciled / deemed domiciled, you need to report your world wide income. 

Deemed Domicile rules

Thank you. 

Hello, Is my status 'deemed domicile' if I've been a UK resident since 2008? My father's home is in India however my permanent home is in the UK. Also, does that mean I've to report any overseas income over £300 in my self assessment i.e. the non-domicile rule of £2000 exemption does not apply to me? Thanks, Vineeta

Hello, I’m waiting for a response for the above question. Thanks for your time.

Hi,

You will be deemed domicile if you were born in the UK with UK domicile of origin and UK resident in 2021 to 2022 tax year, or you have been UK resident for at least 15 of the previous 20 tax years and UK resident in 2021 to 2022 tax year. You need to report any amount of foreign income that you receive.

Thank you.

Hello HMRC, I have interest income recieved in India which I don't plan to bring to UK. I am currently residing and working full time in UK since 2015 and paying UK tax on my UK income. I was born in India and have no other family in the UK. Both my parents were born in India. I am an OIC card holder, having a Portuguese passport. I do not own a house in the UK and plan to retire in India after my retirement, does this mean I am a non-domiciled resident? Please could you advise if I still need to pay tax on interest income earned in India. Many thanks!

Hi,

A person who is resident in the UK and domiciled or deemed domiciled, is taxable on their world-wide income, on the arising basis. This may entail the submission of a Self Assessment Tax Return. A person who is resident, but not domiciled in the UK, is also taxed on their world-wide income on the arising basis, or they can elect not to remit a foreign income to the UK, that arises while they are resident in the UK.  

If they choose not to bring the income to the UK, then it is not taxable in the UK in that tax year. If they choose to remit the income to the UK in a later year, then it would be taxable in that later tax year. If the income was generated in a tax year when they were not UK resident, this would not be taxable when brought to the UK.

To claim the remittance basis is criteria for completing a Self Assessment Tax Return. The residence supplementary page is SA109, is where you declare the use of the remittance basis and the amount of income not remitted to the UK. Tax returns can also be submitted online, however, to submit a tax return that included a residence section, required the purchase of 3rd party software.  

A list of suppliers can be found at:

Self Assessment commercial software suppliers

Thank you.

Dear HMRC, Thank you for your response! Further to what you mentioned above, If I arrived in the UK in the year 2015, does that mean I am a UK resident but non domicile? Do I still need to complete and submit a self assessment even if I am not remitting the earnings to UK? Please could you clarify.

Hi Brian A,

Yes you are tax resident.

Please see further guidance here:

Remittance basis 2022 (HS264)

Thank you. 

Hello I am Ukrainian who moved to UK 2022. I am UK resident non dom. I rent my 6 apartments in Ukraine while staying physically in UK and get my income in Ukraine 1. If it is RELEVANT foreign income, can I be liable to remittance basis on this income. What is it relevant foreign income and what is the difference of relevant foreign income and foreign income. Is remittance basis for non dom residents allowed for relevant foreign income. 2. If I have interest in the foreign bank , being resident non dom can I claim remittance basis on this type of foreign income Many thanks