Telephone: (+350) 200 42686
Innovative and impartial international tax planning, company, trust and pensions services in Gibraltar for private clients, their businesses and their families.
Domicile and Residence
When moving to another country, whether for work or for a lifestyle change, it pays to know in advance the possible tax implications and opportunities.
Some of the principal aspects in determining your tax treatment are your residence, domicile and citizenship.
The ways of determining whether or not an individual is to be treated as a resident differ from country to country.
This important distinction helps determine the basis of taxation; residents are generally taxed on worldwide income plus capital gains, while non-residents are generally only taxed on local income and capital gains.
Some countries may offer you preferential tax treatment as an incoming non-national resident, either as a matter of policy or for a limited period of time.
Among the more common measures tax authorities use for assessing your residency are:
- the amount of time you spend in their country
- a test of your centre of social and economic interest
- a cumulative presence test, looking at your physical presence there over a period of more than one year
- accommodation available to you and the form this takes.
Domicile normally follows you, irrespective of your place of residence, and is very difficult to alter.
The most common forms of domicile are origin, choice, dependency and deemed domicile.
Note that UK tax law relating to domicile, particularly in relation to trusts, changed in 2006. Click here for full details.
You can be resident in more than one country, but can only have one domicile at any point in time.
Such a situation could result in you being subject to tax in various countries despite residing in only one.
In summary, moving to another country does not mean that tax will no longer be due in the country you leave behind.
However, the differences in determining your residency by various countries could create tax opportunities for you.
If you are considering emigration, we can offer you professional tax advice before the move to minimise your liabilities and maximise your opportunities.
To discuss how we can help you, please email us or telephone us on Gibraltar (+ 350) 200 42686 and ask for a member of the International Tax Team.
