tax you leave the UK to live in Gibraltar you may be eligible for the tax year to be split in two parts, a UK part in which you are charged to UK tax as a UK resident, and an overseas part in which, for most purposes, you are charged to UK tax as a non-UK resident. There are set conditions to satisfy.
at least three years. In the past, individuals were able to claim to be taxed on the remittance basis in the UK on the basis of being not ordinarily resident. This is no longer the case. Overseas workday relief (OWR) is, however, retained for non-domiciled individuals. OWR is available to individuals who arrive in the UK, for the tax year of their arrival and for the next two tax years. Under OWR, overseas earnings for that time are taxed only on the remittance basis, if the remittance basis applies.
Temporary non-residence There are temporary non-residence rules for those who leave the UK for less than five complete tax years. When they apply, these rules tax certain income and gains accruing, arising or remitted in the period of non-UK residence Could the SRT affect residents to UK tax in the year of return to of Gibraltar? the UK. Yes, as outlined above, the SRT could affect many individuals, in Transitional provisions particular those who: There are transitional provi- • Are not resident in UK but visit the sions to assist in determining UK, either for pleasure of work your residency position pre com- • Have a home available in the UK mencement of the SRT i.e. before • Have family in the UK 6 April 2013. • Are UK resident but are considering The normal position is that your emigrating to Gibraltar residence status pre SRT is deterIf the SRT is satisfied, then your mined by the rules applied in that year (explained in HMRC’s book- tax position in the UK and Gibraltar should be considered. let HMRC6). For example, certain income However, for the purpose of and gains may be exempt from determining residency for the tax years 2013/14, 2014/15 and tax in Gibraltar, but taxable in the 2015/16 you can elect in writ- UK, or the income could be taxing to HMRC to determine your able in both countries. There is no Double Tax Treaty residency status for a pre SRT (DTT) between the two countries. year by reference to the SRT tests. This election applies solely for DTTs often include tie-breaker the purpose of determining your tests to determine tax residency. residency for the aforementioned They can also dictate which counyears (i.e. 2013 to 2016). It does try has the right to tax and/or not change your actual tax resi- provide a route for claiming exdence status for the year(s) to emption or partial relief from tax which the election applies nor in one country, in order to elimidoes it affect your tax liability in nate or reduce double taxation. In the absence of a DTT, a foreign tax those years. credit may be available in Gibraltar or the UK, depending on the Ordinary residence The SRT also abolishes the source of the income, to provide concept of Ordinary Residence. relief from double taxation, but There has never been a statutory advice should be sought. n definition of this concept, but HMRC guidance would define it as an individual who has always lived in the UK or an individual who moves to the UK, to live, for
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Lynette Chaudhary, International Tax Manager, STM Fiscalis
GIBRALTAR MAGAZINE • MAY 2013
Published on Apr 29, 2013
Published on Apr 29, 2013
Gibraltar's fabulous business and leisure magazine. Crammed full of great features from finance to football, from fashion to arts. Enjoy i...