Formerly Domiciled Residents and Liability to UK Tax
Posted: Wed Feb 19, 2025 11:01 am
When individuals are thinking of returning to live in the UK, there are a number of important matters they should consider before they move back to the UK.
This article focuses on Formerly Domiciled Residents (FDRs), who are non-UK domiciled under general law, but are deemed to be domiciled in the UK for taxation purposes.
Anyone born in the UK with a UK domicile of origin will always be an FDR if they morocco mobile database resume residence in the UK, irrespective of how many years they have lived abroad or whether they have any connections to the UK.
These individuals will pay UK tax on their worldwide income and capital gains, on the same basis as taxpayers who are UK domiciled under general law. Any potential tax advantages which might have been obtained by these individuals, by reason of their UK non-domiciled status, are therefore removed.
Who is a FDR?
A formerly domiciled resident (FDR), is a non-UK domiciled individual who:
Was born in the UK; and/or
Has a UK domicile of origin; and
Is UK resident for the tax year.
Deemed UK domicile is triggered on 6 April in a tax year of UK residence,even if this year is a ‘split’ year under the statutory residence test (SRT).
An individual normally acquires a domicile of origin from their father at birth, or from their mother, if the parents were not married. This is not necessarily the country in which that individual was born.
If an individual does not meet any of the automatic overseas tests but does meet one of the automatic UK tests, or the sufficient ties test, they will be considered a UK resident.
This article focuses on Formerly Domiciled Residents (FDRs), who are non-UK domiciled under general law, but are deemed to be domiciled in the UK for taxation purposes.
Anyone born in the UK with a UK domicile of origin will always be an FDR if they morocco mobile database resume residence in the UK, irrespective of how many years they have lived abroad or whether they have any connections to the UK.
These individuals will pay UK tax on their worldwide income and capital gains, on the same basis as taxpayers who are UK domiciled under general law. Any potential tax advantages which might have been obtained by these individuals, by reason of their UK non-domiciled status, are therefore removed.
Who is a FDR?
A formerly domiciled resident (FDR), is a non-UK domiciled individual who:
Was born in the UK; and/or
Has a UK domicile of origin; and
Is UK resident for the tax year.
Deemed UK domicile is triggered on 6 April in a tax year of UK residence,even if this year is a ‘split’ year under the statutory residence test (SRT).
An individual normally acquires a domicile of origin from their father at birth, or from their mother, if the parents were not married. This is not necessarily the country in which that individual was born.
If an individual does not meet any of the automatic overseas tests but does meet one of the automatic UK tests, or the sufficient ties test, they will be considered a UK resident.