A number of our clients swap the UK for warmer climes, but their domestic tax liabilities do not end there.

While it is accurate to say calculating tax affairs for these individuals is more complex, our residency service covers all the bases.

If you are unsure of your UK tax status after moving abroad, or are new to the UK, we can advise.

Equally, we assist expats with assets in the UK that generate income or gains that are liable for tax. Most commonly, this takes the form of non-UK resident landlords.

Determining tax residence status

HMRC uses the statutory residency test to determine the tax residence status of individuals with connections to the UK.

This test consists of three main components, which act as a clear framework to determine your tax residence status.

Four tests ascertain whether or not HMRC will class you as automatic UK resident for tax purposes that fall within a certain tax year.

Similarly, four tests also apply to determine if the Revenue will treat you as automatic overseas resident.

The third component is known as a sufficient ties test, which applies if the previous two tests fail to determine your residence for tax status.

In layman’s terms, if you pass the automatic UK test or sufficient ties test, you will be a UK resident for tax purposes.

Equally, you will be non-resident for tax purposes if you pass the overseas test.

Expats with UK assets

British expats and non-UK residents, especially those with income from buy-to-let properties in the UK, are liable for tax on gains made from the disposal of assets.

A loophole previously enabled expats and overseas investors to avoid paying capital gains tax on the sale of residential properties – that loophole closed in 2015.

Depending on your personal circumstances, capital gains tax may be payable at 28% on any profit made from the sale of a residential property.

A tax rate of 20% usually applies for any gains made from the sales of other chargeable assets.

You should report any tax on rental income from properties in the UK through self-assessment.

Double taxation

Double taxation may occur where you live in one country and have income or gains in another country.

To prevent this, the UK has double-taxation treaties with more than 100 countries to avoid individuals being taxed twice on the same income or gains.

In rare cases where the UK does not have an automatic double-taxation treaty with another nation, double-taxation relief or foreign tax credits may be available.

Given the intricate nature of double taxation, our residency service puts us in the perfect place to advise you on which relief or credit may be available.

If you have any residency-related queries or would like us to assess your residency status, get in touch.