KPMG have published a guide to the new domicile rule. It includes this fascinating flow chart:
I am not going to argue with one little bit of that. The fact is that it is not what is said that matters here, it is what is not said that matters.
There are two serious omissions. The first is any attempt to tackle the issue of the long-term low-paid migrant worker. Perhaps that is because they cannot afford tax advice.
The second is the glaringly obvious fact that this model is not sustainable.
I suspect that the first budget made after the 2010 general election, whoever is then in power, will see the rule change. It's my bet but it will go, to be replaced by a better, statutory, definition of residence.
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We are a retired couple. My husband is a US citizen; I am British. We’ve been married over 37 years and have lived in both countries. We retired to the UK. We have not and will not ever be on unemployment or other benefit. We have retained private health insurance. Our pension and assets are enough to take care of us until we die, we hope. So far, we have been spending down our British assets by renovating a Victorian house with many problems and have explored the UK, eaten out, bought furniture, etc. My husband hasn’t been in the UK for seven years yet, but we are very concerned that we will have to leave soon because we can’t afford to pay double taxation. The US Govt. insists that we pay income tax (which we have always dutifully and honestly done) to them, and the new UK laws seem to suggest that we pay the UK Govt. as well. Even if we do so on a remittance basis, the two together will make it impossible to have enough left from our income to live comfortably, or even uncomfortably. Any advice or am I completely wrong about all this? I’m confused, to say the least.
Sandra
I do not give individual advice on US issues
I do strongly recommend you get advice and suggest you start here http://www.taxadvicenetwork.co.uk/index.asp?PageID=10&topID=4
Richard