ACCA Advanced Taxation (ATX) Practice Exam

What is the threshold for long-term UK residents to be deemed UK domiciled?

1. UK resident for 10 of the previous 15 tax years

2. UK resident for 15 of the previous 20 tax years

3. UK resident for 20 of the previous 25 tax years

4. UK resident for 5 of the previous 10 tax years

The correct answer is: UK resident for 15 of the previous 20 tax years

To be deemed UK domiciled for tax purposes, an individual must be a UK resident for 15 of the previous 20 tax years. This rule is part of the criteria that were introduced in recent legislation to establish a clearer connection between residency and domicile status. Being deemed domiciled means that an individual is subject to UK tax on their worldwide income and gains, rather than just UK-source income. The requirement of 15 out of the previous 20 years means that individuals who have had a long-standing residence in the UK over that period are recognized as having a significant and established connection to the UK. This policy aims to prevent individuals from using domicile status strategically to minimize tax liability after having lived in the UK for a considerable amount of time. The other options do not reflect the established threshold for deeming domicile, making them inapplicable for determining UK domicile status based on residency.