In which country and how much income and dividend tax your pay, is very dependent upon your tax residency status. In most cases, your tax residency status will be pretty straightforward, but one of the questions most probably on your lips is ‘when am I a non-UK tax resident?
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⏱️ Time Stamps:
0:46 – What does it mean by tax resident and is it the same as citizenship?
2:03 – The Statutory Residence Test (SRT)
4:59 – Sufficient Ties Test
6:07 – A word of caution
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★ As an individual, there are 2 key statuses you have:
☆ No 1 is your citizenship of a particular country. So for example here in the UK, if you hold a British passport or are eligible for one, you would be a British citizen. And as a citizen, you have certain rights, like the right to vote.
☆ No 2 is your tax residency. This is when you are resident in the UK for tax purposes, and pay UK taxes, in this video we will cover namely income and dividend tax on your earnings.
Now, being a British citizen and being UK tax residency is the most common scenario for most of you. However, you can be a British citizen and non-UK tax residency. Or you can be a non-British citizen and UK tax residency. The two are mutually exclusive.
By being a UK tax resident, you are liable to pay UK income tax and dividend tax on your worldwide earnings, whether through employment, self-employment or dividends received from a company.
But the question is, how is your tax residency determined? Before we go on, meet Sunny, who is a Limited company business owner, and he likes to travel around a bit.
We hope this video has helped you understand how and when you could become non-UK tax resident and taken you one step closer to knowing your numbers.
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Me & my team are dedicated to helping and empowering YOU to ‘Know Your Numbers’ so you can make calculated and informed decisions in your business, company and personal finances towards your definition of success.
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Our videos are for general guidance, education and empowerment in helping you understand accounting, tax and your numbers. They in no way constitute specific advice to your specific circumstances. Me & my team would be delighted to help you with your specific queries or accounting requirements through a formal engagement.
#tax residency #tax residental status