ACCA Advanced Taxation (ATX) Practice Exam

If an individual is not domiciled in the UK, is the level of unremitted overseas income and gains significant?

1. Yes, it is significant

2. No, it is not significant

3. Only if the income is above a certain threshold

4. Only if the individual has assets in the UK

The correct answer is: Yes, it is significant

When considering the tax implications for an individual who is not domiciled in the UK, the concept of unremitted overseas income and gains becomes crucial. Non-domiciled individuals in the UK are typically only taxed on their UK income and gains, along with any overseas income and gains that they choose to bring into the UK. This means that unremitted overseas income and gains are indeed significant because they represent the income and gains on which the individual can defer UK taxation as long as they are not brought into the country. This position allows non-domiciled individuals a level of flexibility regarding their international finances. Consequently, the amount of unremitted overseas income and gains can influence financial decisions, including investments, savings, and expenditures, as these amounts remain untaxed until they are remitted to the UK. Thus, understanding the significance of unremitted overseas income and gains is essential, as it directly impacts the tax liabilities of non-domiciled individuals, shaping their financial and tax planning strategies.