Oz to UK. Domicile Status

[Oz2UK]

Hi, I'm new to site but have read some interesting comments. Thank you.

I'd really appreciate any guidance on our situation:

My family came from Oz to UK 2 yrs ago for 6 months to see UK family. Due to their serious health issues we have stayed on longer. I have a small Oz business (Pty Ltd) that I've been drawing an income from and have just found out that we should have submitted a P86 and tax returns for the period we've been here.

We intend to do this right way to set things right. It was a genuine misunderstanding and I hope th HMRC are reasonable with this.

My first question is that on the P86 under Domicile. Q 11 asks whether "your travel costs have been borne by your employer?" . As this is about Domicile can you help me understand the relevance? Does this mean that if your Oz employer (my own business) has paid for my travel costs to UK I'm less likely or more likely to be considered as Domiciled in UK?

Secondly, as we may be here for another 6 months (total 2.5 yrs) and even possibly longer, and have flexibility on how we set things up. Eg a UK company etc .., what is the best way to handle income from overseas. There may be some small amounts earned here in UK too.

Thank you for sharing any experience you have.

[Yaz]

You would still be domiciled in Australia but you are currently a tax resident of the UK. As you've been in the UK for more than 183 days you have to pay UK tax on your earnings. There is however a billateral tax agreement with Australia so if you can show you have paid tax there on these funds then you should be ok. Having said that, you should be paying tax here. So any funds you are receiving here (if they are paid gross) you should pay tax on.

Originally Posted by Oz2UK

Hi, I'm new to site but have read some interesting comments. Thank you.

I'd really appreciate any guidance on our situation:

My family came from Oz to UK 2 yrs ago for 6 months to see UK family. Due to their serious health issues we have stayed on longer. I have a small Oz business (Pty Ltd) that I've been drawing an income from and have just found out that we should have submitted a P86 and tax returns for the period we've been here.

We intend to do this right way to set things right. It was a genuine misunderstanding and I hope th HMRC are reasonable with this.

My first question is that on the P86 under Domicile. Q 11 asks whether "your travel costs have been borne by your employer?" . As this is about Domicile can you help me understand the relevance? Does this mean that if your Oz employer (my own business) has paid for my travel costs to UK I'm less likely or more likely to be considered as Domiciled in UK?

Secondly, as we may be here for another 6 months (total 2.5 yrs) and even possibly longer, and have flexibility on how we set things up. Eg a UK company etc .., what is the best way to handle income from overseas. There may be some small amounts earned here in UK too.

Thank you for sharing any experience you have.

[Punktlich2]

Originally Posted by Oz2UK

Hi, I'm new to site but have read some interesting comments. Thank you.

I'd really appreciate any guidance on our situation:

My family came from Oz to UK 2 yrs ago for 6 months to see UK family. Due to their serious health issues we have stayed on longer. I have a small Oz business (Pty Ltd) that I've been drawing an income from and have just found out that we should have submitted a P86 and tax returns for the period we've been here.

We intend to do this right way to set things right. It was a genuine misunderstanding and I hope th HMRC are reasonable with this.

My first question is that on the P86 under Domicile. Q 11 asks whether "your travel costs have been borne by your employer?" . As this is about Domicile can you help me understand the relevance? Does this mean that if your Oz employer (my own business) has paid for my travel costs to UK I'm less likely or more likely to be considered as Domiciled in UK?

Secondly, as we may be here for another 6 months (total 2.5 yrs) and even possibly longer, and have flexibility on how we set things up. Eg a UK company etc .., what is the best way to handle income from overseas. There may be some small amounts earned here in UK too.

Thank you for sharing any experience you have.

Form 86 deals with residence, and provides hints to HMRC as to whether there may be domicile issues, dealt with by form DOM1.

If your father was born in the UK it is possible he was domiciled in the UK (England, Scotland or NI, etc.) at the time of your birth and that you are UK-domiciled. This is not likely, but it is possible. It is more probable that even if your father was born in the UK he had acquired an Australian domicile of choice, and so your domicile of origin is Australian.

Be very careful how you answer questions on forms 86 & DOM1 so as not to raise the suspicion or supposition that you are UK-domiciled and hence taxed on worldwide income even during your first five years of residence.

Otherwise, if you are non-domiciled, you are taxed on a remittance basis. This is important if (and only if) you have significant foreign earnings and capital gains that you do not remit to the UK and which are therefore not taxed.

I think the meaning of Q11 is that if (as I have supposed) you are non-domiciled, only then is employer-paid transportation fully non-taxable.

On the basis of what you have said, it is irrelevant that your own company was the source of funds for your travel: you came here to visit family, essentially a tourist purpose. You are probably not deemed "ordinarily resident" in the UK (a term of art) but only "resident".

If you have the right to work (if, for example, you are a UK or EU citizen by descent) it may be to your interest to pay NIC "stamps" and qualify for a State pension -- but only if you will ultimately have at least ten years of contributions. You may be taxable on earned funds you remitted to the UK (but not capital or savings). If you are wealthy then it is unwise to rely solely on an Internet blog or forum. You should get specialist advice even though it may not be cheap.

(As another has said, there is a double taxation convention with Australia. There is also a totalisation agreement covering national insurance/social security contributions and benefits
http://www.facsia.gov.au/guides_acts...de-10.3.5.html )

The rules for imposing income tax on foreign domiciliaries temporarily resident in the UK are arcane. You might start here for information (an HMRC leaflet): http://www.hmrc.gov.uk/cnr/hmrc6.pdf