Deemed Domicile Rules and the SRT

Mr X arrived in the UK on 11 January 2007 (he was previously resident in the USA and expatriated a few days before arriving here). He has been resident here ever since.

Under s807C, ITA 2007, he started paying the Remittance Basis Charge of £30k p.a. in 2013/14 because he had been resident IN the UK for the previous 7 years. This rose to £60k p.a. from 2018/19 because he had been resident IN the UK for the previous 12 years. The question is: when does he stop paying the RBC and move to the arising basis. Logically, under the wording of s807C the arising basis would apply for 2021/22. However, s835BA says that someone will be deemed domiciled if he has been UK resident FOR 15 years… This would mean that the arising basis would only apply for 2022/23.

Is there a distinction between the use of the words “in” and “for” in the different sections, and does it matter that Mr X arrived in the UK at a time before the SRT was brought in?

No. See FA 2003 Sch 45 para 2(3) where what is meant by “for” is explained.

Your reference to ITA 2007 s807C should be to s809C.

Mr X, you indicate, became UK resident for the first time for the tax year 06/07.

He first incurred the RBC in tax year 13/14 because he had by then been UK resident for 7 out of 9 preceding tax years.

The deemed domicile rules applied for the tax year 17/18 and later tax years.

However, in tax year 17/18 Mr X had been UK resident for only 11 of the previous tax years. In tax year 18/19 Mr X had been UK resident for 12 of the previous tax years (hence an increase in the RBC would arise).

In tax year 21/22 Mr X had been UK resident for the previous 15 tax years and hence became deemed domiciled for tax year 21/22 and thus in that tax year would be subject to tax on the arising basis. No RBC.

Malcolm Finney

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Thank you (although I think that you mean FA 2013). Para 2(3) appears to be relaxed by para 2(4) which in turn refers to sch 45 part 3. Mr X is within case 4 (para 47): does this then mean that we can ignore 2006/07?

FA 2013 para 2(3) is, as you say relaxed because of para 2(4) ie although an individual is resident for a whole tax year split year treatment may apply under which certain categories of income if arising in the overseas part of a tax year.

However, even where a split year arises (in your case 06/07), an individual is treated as resident for the whole of that tax year.

So, no, you cannot ignore Mr X’s residence for 06/07.

Malcolm Finney
(sorry, FA 2003 should have been 2013 in my earlier post)


Thank you. This is greatly appreciated (by me, if not by Mr X!)