Determining your tax residence is not just a formality; it’s a crucial aspect of your financial strategy that significantly impacts where, when, and how much tax you pay in a given tax year. Different countries have varying tax residence rules, and it is possible to be considered a tax resident in multiple countries simultaneously. In such cases, the proper application of double tax treaties is essential to establish your tax residence correctly and avoid double taxation.

Tax residence rules are also vital from a tax planning perspective. Personal circumstances can change frequently, such as when relocating to another country. Revisiting your tax residence position during such life events is crucial, as the tax implications can be substantial. Ensuring you understand and comply with these rules can save you from unexpected tax liabilities and optimise your financial planning.

The complexity of tax residence rules, particularly in the UK, where they are defined by the intricate and technical Statutory Residence Test, underscores the necessity for professional assistance. Navigating these rules requires expert knowledge to ensure compliance and to make informed decisions that align with your financial goals.

Case study

Smith, who relocated to the UK from Monaco in September 2023, inquired about utilising the Statutory Residence Test’s split-year tax treatment. He believed this could limit his UK tax residency to the period following his arrival, rather than the entire 2023/24 tax year.

After analysing the relevant cases within the Statutory Residence Test for individuals arriving in the UK, we determined Smith may be eligible for split-year taxation. This could make him a UK resident for tax purposes only from his arrival date, potentially saving him a significant amount on UK taxes.

Relocating to the UK is an exciting life event, but it can also be overwhelming due to the numerous personal, financial and tax considerations involved. At Bolt Burdon, we help alleviate this pressure by supporting you from the decision to relocate until you are fully settled in your new home. This gives you peace of mind, allowing you to focus on what truly matters: your personal and professional life.

We achieve this by assisting you with:

  • Assessing your tax residence status during the relocation tax year and the following years.
  • Checking the application of split-year tax rules.
  • Liaising with legal and tax advisors in your country of departure to ensure compliance with all legal and tax obligations before your move.
  • Providing tax and wealth planning to mitigate any possible consequences of your relocation to the UK.
  • Working alongside other professionals, such as accountants, financial advisers, and wealth managers, to help you achieve your goals in the UK.

Case study

Sonia has lived in Spain for the past twenty years but she decided to move to the UK in September 2023. She contacted us because she wanted to know where she was a tax resident and her tax obligations in each country.

Spain and the UK have different tax residence rules and tax years. At Bolt Burdon, we analysed the Spanish and UK legislation and the double tax treaty between both countries. We established Sonia’s tax residence and specified her tax obligations in each country. Given her non-domiciled status, we additionally examined the remittance basis as another strategy to optimise her UK tax position.

Leaving the UK to relocate to another country is an exciting life event but can also be overwhelming. There are multiple issues to consider, not only from a personal perspective but also from a financial and tax one.

At Bolt Burdon, we can help you alleviate this pressure by accompanying you throughout the entire journey, from the decision to relocate until you are settled in your new home and everything in between. This provides you with peace of mind, allowing you to focus on what matters: your personal and professional life.

How do we achieve this? By assisting you with:

  • Assessing your tax residence status in the relocation tax year and the following ones.
  • Checking the application of the split-year tax rules.
  • Liaising with legal and tax advisors in the country of destination to ensure compliance with your legal and tax obligations before your arrival, making it as smooth as possible.
  • Providing tax and wealth planning to mitigate any possible consequences of your relocation from the UK.
  • Working alongside other professionals, such as accountants, financial advisers, and wealth managers, to help you achieve your goals in your new country.

Case study

Sarah has lived in London all her life. However, she decided to move to France for work reasons. She contacted us to understand her tax residence and domicile position in the UK after her relocation to France.

At Bolt Burdon we analysed her circumstances in conjunction with the tax residence and domicile legislation. We determined her tax residence for the year of relocation and explained any important ‘tax tails’ with the UK in the following years. Regarding domicile, we explained the tax consequences of it, especially from an Inheritance Tax perspective and ways to mitigate these.

Individuals living in the UK must be aware of both their tax residence and domicile status, as these have significant tax implications, particularly concerning UK Inheritance Tax. Non-UK domiciled individuals can benefit from the remittance basis tax regime, which can be highly advantageous. However, the UK tax framework for non-domicile individuals is complex and can result in inefficient tax situations if not properly managed.

On 6 March 2024, the UK Government unexpectedly announced the abolition of the non-dom tax regime, effective from 6 April 2025. However, legislation has not yet been passed, leaving non-UK domiciled individuals in a state of uncertainty as they await the new set of rules.

At Bolt Burdon, we can help you navigate the non-dom tax framework, maximizing its benefits while it remains in place and preparing you for future changes if the regime is overhauled. Our expertise ensures you stay compliant and make informed decisions, mitigating potential tax inefficiencies and safeguarding your financial interests.

Case study

Magnus lived all his life in Germany, but in 2022, he decided to move to the UK for work reasons. However, he kept important investments and properties in Germany. He receives income and gains from those each year. Magnus contacted us seeking advice on the application of the remittance basis.

At Bolt Burdon we advised Magnus on the application of the remittance basis, considering his specific circumstances. Its application also means losing, for example, the personal allowance, so we took into consideration all the details before establishing that in his case, the remittance basis was the best option based on the value of his income and gains from Germany. We discussed strategies to manage his remittance of income and gains to the UK per HMRC regulations.

In our globalised world, the complexity of tax matters has increased substantially, especially given the interconnection among jurisdictions when an individual has interests in different countries.

At Bolt Burdon, we deal with international tax matters daily. Our goal is to ensure compliance with all your tax obligations, helping you understand them fully and avoiding the risk of future penalties and interest.

We provide advice on all tax issues directly affecting individuals, assisting with:

  • Tax residence
  • UK Personal Income Tax for tax residents and non-residents
  • Capital Gains Tax and Non-resident Capital Gains Tax
  • UK Inheritance Tax, including lifetime gifts
  • Property taxes, such as Stamp Duty Land Tax and Annual Tax on Enveloped Dwellings
  • Application of double tax treaties
  • Taxation of trusts
  • Taxation of foreign entities, such as foundations or usufructs

Case study

Ava has always lived in Dubai, so she is not a UK-domiciled or a UK-tax resident individual. However, she owns a property in central London through a non-resident company. She contacted us seeking advice on the best way to dispose of the property from a UK tax perspective.

At Bolt Burdon, we helped Ava navigate the tax implications of selling her property held within a company. Our analysis compared two key options, each with its advantages and disadvantages:-

  • Option 1: Share Sale: This approach involved selling the shares in the company that owned the property. This avoided Stamp Duty Land Tax (SDLT), but triggered Non-Resident Capital Gains Tax (NRCGT) considerations.
  • Option 2: Company Wind-Up and Direct Sale: This option involved dissolving the company, transferring ownership of the property directly to Ava, and then selling it. While this avoided NRCGT, it would have incurred SDLT on the property sale.

At our firm, we offer comprehensive wealth and succession planning services tailored to your unique needs. From creating wills and trusts to sophisticated tax planning and asset protection strategies, we ensure your financial legacy is preserved for future generations. Our expertise extends to setting up UK and offshore trusts, family investment companies and advising on the tax implications of international entities.

We provide detailed, personalised advice to help you navigate the complexities of succession planning. This includes drafting and reviewing wills, inheritance tax planning and ensuring your assets are distributed according to your wishes. Our goal is to seamlessly integrate all legal and financial aspects, giving you peace of mind and allowing you to focus on what truly matters.

Partnering with us ensures your wealth and legacy are protected, offering you confidence and security. Whether planning for retirement, transferring wealth, or managing a complex estate, our experienced team is here to guide you every step of the way.

Case study

John contacted us seeking advice on ways to plan and organise how his wealth would be distributed on his death, considering UK inheritance tax mitigation. He particularly wanted to limit how much of his Estate would go to one of his sons.

At Bolt Burdon we discussed and advised on two alternatives. Using an offshore trust or setting up a Family Investment Company. Both options were efficient from a tax perspective, but different from a control perspective. The client decided to set up an offshore trust as it was very tax efficient considering his circumstances (non-UK domiciled). Additionally, he decided that his son would not be a beneficiary, excluding him from receiving anything in the trust. We assisted him on every step of the planning.

Case Study

The Dubois family, originally from France, have resided in the UK for six years. Jean and Marie, both French citizens, have two children: Chloe and Alex. They own a charming cottage in the French countryside and their primary residence is in London. Despite their UK residency, they consider France their permanent home.

The Dubois family faces a complex situation due to their dual residences and French domicile. Their assets span two countries with distinct inheritance laws. Jean and Marie are not yet considered UK-domiciled for inheritance tax purposes, giving them some time to ensure a smooth estate plan in both countries.

At Bolt Burdon we worked with the Dubois family to understand their wishes for wealth distribution and ensure their children inherit fairly. Using our UK inheritance tax expertise and liaising with their French adviser we were able to analyse the legal landscape of both jurisdictions to develop a tailored plan which included the following:

  • English Wills drafted and coordinated with their French Wills covering the French property
  • Planning for potential UK inheritance tax on their UK residence if they remain non-domiciled and advising on excluded property trusts
  • Considering the impact of the French-UK Double Taxation Treaty on inheritance tax

With a comprehensive plan in place, the Dubois family can navigate their cross-border estate with greater clarity. Their children’s inheritance rights are protected, and potential tax burdens are minimized. Knowing their future is secure, they can focus on enjoying their lives in both France and the UK.

This case study highlights the importance of seeking legal advice for families with international ties. By understanding domicile, inheritance laws, and available tax planning, we can guide families like the Dubois through the complexities of cross-border estate planning.