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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Do I still have to pay income tax/capital gains tax on investments

Resolved Question:

Do I still have to pay income tax/capital gains tax on investments I have made abroad (such as bank interest or funds), in the event that I bring them to the UK but I live less than 183 days in the UK? If so, is it income tax or capital gains tax that I have to pay?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.
You only pay income tax on income or capital gains tax on income in the UK if you are tax resident in the UK. That is determined by referring to the Statutory Residence Test rules here:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/458559/RDR3_govuk_hyperlink__updated_078500.pdf
A flowchart of the rules is here:
http://www.blplaw.com/media/how-can-we-help-you/private-client/BLP%20Summary%20flowchart.PDF
If you are UK domiciled and tax resident in the UK, you are taxable in the UK on your worldwide income and gains regardless of whether they are remitted to the UK or not.
If you are non-UK domiciled but UK resident, then you can use the remittance basis of assessment if you wish as described in section 9 of RDR1 here:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464664/RDR1_FB15_updates_RB_and_CGT.pdf
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Can you tell me in simple terms if I can live 6 months in the UK and 6 months abroad every year, and still use the money I get from capital gains abroad in the UK, without having to pay tax on it?
Expert:  TonyTax replied 1 year ago.
It can only be done in simple terms if you answer the questions in the flowchart here. What will you do in the UK when you are here? Are you a UK or a foreign national? Do you have a UK home? Do you have a home overseas.
Customer: replied 1 year ago.
The answer to every flowchart question is no, up to the "determine arriver or leaver status". I will be self-employed running my own business, which gives me a separate income from the one that I get from outside the UK. I'm a British citizen, but do not own a property in the UK or any other country.
Expert:  TonyTax replied 1 year ago.
Then it comes down to the sufficient ties test starting on page 30 of RDR3 here. If you spend 182 days in the UK in a tax year, then you will be tax resident and therefore liable to UK tax on your worldwide income (subject to the tax treaty between the UK and where you spend the other six months of the year) if you have 2 ties to the UK. I would suggest you will have a work tie because you will be self-employed in the UK. You don't own a property in the UK but you will have to live somewhere so look at paragraph 2.10 to 2.14 inclusive starting on page 31 of RDR3 and then at Annex A starting on page 91 of RDR3 here.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15841
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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