FAQ: Residence and domicile - general

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Can you confirm that people letting a foreign property can have a deduction for interest paid on a loan to acquire the foreign property?

Yes. So long as the letting of the foreign property is being carried on a commercial basis then section 358 ITTOIA will apply and tax will be chargeable on the letting income net of expenses. The deductions to be made before arriving at the net income include mortgage interest.

Do I still have to fill in a Self Assessment tax return in order to claim the remittance basis when I have no tax liability in the UK and I do not remit any foreign income or gains to the UK? I came to the UK when my spouse/civil partner moved here to work and I have been here for less than seven years. I have no UK income or gains, but I receive over £2,000 of untaxed income which I keep in a bank account back home.

No, that will not be necessary. If a non-domiciled individual, resident in the UK, has no tax liability in the UK, they do not have to complete an Self Assessment return. However, once they remit foreign income or gains or they have been in the UK for more than seven out of the previous nine years and the £30,000 charge is due, the individual will have to make a Self Assessment return.

I have been using the ceased source loophole ie remitting income to the UK only after the source no longer exists. What happens now?

This loophole has been closed and any remittances of untaxed relevant foreign income after 5 April 2008 will attract a charge to tax, whether or not the source of the income has ceased.

Does the rebasing election apply to assets held directly by non-domiciled individuals?

No, the option to rebase assets held as at 6 April 2008 applies only to the trustees of non-resident trusts.