The UK is not one of those countries where you enjoy the no-tax privilege.
Although you can still live in the UK as a foreigner for a very long time without paying tax or just paying little.
Countries like Dubai, Monaco usually give the privilege of no tax payment to their residents. In these countries, you are likely to enjoy the financial benefit of having to pay no income tax.
The amount of tax paid in the UK sometimes depends on the domicile and your residence. They tend to have a reasonable effect.
The tax regime in England is called “resident but non-domiciled” i.e under certain conditions the person is not taxed with foreign income, which is placed abroad and not imported into the UK.
The scheme exploits different definitions of residence and makes it possible to facilitate individuals who receive foreign income. This article provides all the necessary information in this regard.
In addition to being a very important economic and financial centre, it is also the most important centre for tax planning activities at an international level.
Moving abroad is not difficult in itself, but it is necessary to do so in compliance with some requirements required by tax legislation.
Domicile
In this article, however, a particularly favourable tax regime applicable to individuals is analysed. It is referred to as resident non-domiciled in the UK, but also in other countries, such as Malta and Ireland.
This regime can prove to be very advantageous as it allows you to get taxed in a country where taxation is applied only on income from internal sources.
On the contrary, foreign source income is not subject to taxation unless it is transferred to the United Kingdom according to the so-called remittance basis.
This article aims to make you understand how this scheme works and what the problems may be related to the identification of the State of tax residence of the expatriate person in the United Kingdom.
Non-domicile resident
To understand the concept of non-domiciled residents it is necessary to assume that the concept of domicile as identified for civil purposes is defined differently by international laws as compared to what happens in Anglo-Saxon law.
The difference between the two regulations creates a tax opportunity that can be advantageous for some categories of subjects.
This means that moving to England can potentially offer important tax advantages, but provided you comply with the provisions of tax legislation.
Even the average taxpayer, who does not want to hide their income and does not want to violate any tax law, can take advantage of some tax institutes created specifically for him by the tax law of England.
To understand where this particular facility comes from, it is necessary to analyse the two basic concepts that allow us to establish where an individual pays income taxes.
Let’s try to understand what the residence and the domicile are. Contact london-immigrationlawyer.co.uk for more information regarding rules for non-domicile residents
The concept of residence
The residence, as we know it from a civil law point of view, represents the physical place where one’s home is located, or rather our usual residence.
The usual home is the place where we spend most of the year. To give an idea, the resident is the one who wants to move to England and does it, intending to remain stable over time.
For this, the resident has bought a property in England or has entered into a rental contract, with utilities. Or he still attends schools, courses, or has a stable job in the UK.
The tax legislation of any country provides that individuals residing in a country are obliged to pay income tax to them there.
On the other hand, if you are resident in Italy, but you have made England the centre of your main interests (family, business, work), you are given domicile in England, but your residence (also in the tax field) remains in Italy.
If you fall into the category of the ordinary resident ( ordinary residence ) you do not enjoy any subsidised tax regime and you pay personal income taxes like any other English citizen, that is between 20% and 45%.
You also pay taxes on all income, both those generated in England and those generated overseas.
There is no difference between income generated abroad and income generated in English territory.
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