Malcolm Finney takes a look at new rules introducing the brand-new concept of a formerly domicile resident.
Legislation in Finance (No 2) Act 2017 introduced the concept of ‘deemed domicile’ for income tax and capital gains tax purposes, effective from 6 April 2017. Hitherto, deemed domicile was of relevance only with respect to inheritance tax.
However, no longer is it necessary to reside in the UK for a minimum number of tax years (be it 15 or 17) where an individual is categorised as a ‘formerly domiciled resident’ (also commonly referred to as a ‘returner’).
Formerly domiciled resident individual
Someone is a formerly domiciled resident if in the tax year the individual:
- is resident in the tax year;
- possesses a UK domicile of origin;
- was born in the UK (ITA 2007, s 835BA).
Residence for a single tax year automatically
