ACCA Advanced Taxation (ATX) Practice Exam

Which scenario leads to a non-UK domiciled resident not being deemed UK domiciled?

1. They have been UK resident for less than 20 years

2. They have not been UK resident in any tax year after 5 April 2017

3. They were born outside the UK

4. They own property outside the UK

The correct answer is: They have not been UK resident in any tax year after 5 April 2017

A non-UK domiciled individual can avoid being considered UK domiciled for tax purposes under specific conditions. The correct scenario is that they have not been UK resident in any tax year after 5 April 2017. This is significant because, as of this date, changes in UK tax law mean that individuals who have been UK residents for 15 of the previous 20 tax years are automatically deemed to be UK domiciled. Therefore, if the individual has not been a UK resident after this date, they do not trigger the same rules that would apply to someone who has been residing in the UK continuously. The other scenarios do not necessarily result in non-deeming for UK domicile. For instance, being UK resident for less than 20 years does not prevent someone from being considered UK domiciled after a certain period of residence. Being born outside the UK does not in itself determine domicile, as domicile is more related to habitual residence and intention. Owning property outside the UK is also irrelevant to the assessment of domicile status, as domicile is based on broader considerations of personal and familial connections rather than merely the location of assets.