ACCA Advanced Taxation (ATX) Practice Exam

Under what condition are long-term UK residents NOT deemed UK domiciled?

1. If they are UK resident in any tax year from 2016/17 onwards

2. If they are not UK resident in any tax year from 2017/18 onwards

3. If they were born outside the UK

4. There is no exception for long-term residents

The correct answer is: If they are not UK resident in any tax year from 2017/18 onwards

A long-term UK resident is generally deemed to be UK domiciled if they meet certain residency criteria, particularly if they have been UK resident for at least 15 out of the last 20 tax years. However, if a long-term resident does not meet the residency requirement for a specific tax year—specifically, if they are not resident in the UK for that tax year—it can affect their domiciliary status. The correct answer highlights that long-term UK residents are not deemed UK domiciled if they do not hold UK residency in any tax year from 2017/18 and onwards. This affects their liability to UK inheritance tax and other aspects of their tax residency. The rationale behind this is to provide a form of relief or flexibility for individuals who might have established ties with other jurisdictions or who may be temporarily residing outside the UK, thereby allowing them to retain their non-UK domiciliary status if they are not considered UK residents. In contrast, simply being born outside the UK does not automatically exempt an individual from being deemed UK domiciled, as domicile is more closely related to residence and habitual connection with a country rather than place of birth. Additionally, long-term residents can indeed be deemed UK domiciled under certain conditions, hence the assertion that there