{"id":19451,"date":"2025-03-19T16:19:32","date_gmt":"2025-03-19T16:19:32","guid":{"rendered":"https:\/\/theprogenygroup.com\/?p=19451"},"modified":"2025-03-20T14:26:27","modified_gmt":"2025-03-20T14:26:27","slug":"dual-residence-and-double-taxation-treaties","status":"publish","type":"post","link":"https:\/\/theprogenygroup.com\/en-be\/knowledge-hub\/dual-residence-and-double-taxation-treaties\/","title":{"rendered":"Dual residence and double taxation treaties"},"content":{"rendered":"\n

As a UK tax advisor, I speak with a lot of individuals who have left the UK. They made the leap, might have bought property abroad, may  have a right to live in another country and might even be tax resident there. But does this mean they are a non-UK resident?<\/strong><\/p>\n\n\n\n

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It\u2019s a common misconception that just because you own property abroad or are a tax resident that you are automatically entitled to a non-UK resident status, but unfortunately this is incorrect.<\/p>\n\n\n\n

Determining residence<\/strong><\/strong><\/h2>\n\n\n\n

When I speak to clients about UK residence, the first thing we will discuss is our domestic law position. That\u2019s the UK legislation, namely the Statutory Residence Test (SRT) and to some degree case law where concepts have been challenged since its introduction in 2013.<\/p>\n\n\n\n

This first crucial step decides how the UK sees the individual in terms of residence for a complete tax year. With three layers to the SRT and a requirement to work through it in order, the test gives each individual a clear outcome as to whether they are UK resident or not for each tax year in question. The test factors in a person\u2019s work, homes, family and time spent in the UK, but never their intention, never where they consider themselves to be resident nor whether that individual is resident in another country. <\/p>\n\n\n\n

When advice isn\u2019t sought before leaving the UK, or perhaps becoming non-UK resident was just not possible, the individual may find themselves a \u2018dual resident\u2019. This means resident in more than one country at the same time \u2013 a concept that is entirely possible, even if unexpected.<\/p>\n\n\n\n

This would be the case where an individual was UK resident under the SRT and resident under another countries domestic law position. Quite often UK tax years don\u2019t align to other countries, meaning it might only be part of the tax year affected, which can cause further complexity. <\/p>\n\n\n\n

What to do if you are dual resident<\/strong><\/strong><\/h2>\n\n\n\n

Finding yourself dual resident can be confusing and often unexpected. It could mean that without further exploration each country will have taxation rights over your income and gains, possibly on a worldwide basis. The first thing will be to consider whether the UK has a Double Taxation Treaties with the other country. The UK shares treaties with over 100 countries and even with countries that would be considered as tax havens, such as the UAE.<\/p>\n\n\n\n

The aim of a Double Taxation Treaty is to avoid or alleviate double taxation. As tax advisors we might consult a treaty for a variety of reasons, the most common to understand which country has taxation rights on income and\/or gains. In the case of dual residence, a series of tie breaker tests will determine whereby the individual is resident for the purpose of reviewing the remainder of the treaty, the individuals \u2018treaty residence\u2019. <\/p>\n\n\n\n

Unfortunately, areas of these tie breaker tests are not always clear and can be ambiguous. Ultimately, the outcome will be important in understanding your taxes and how you will be taxed in each country.<\/p>\n\n\n\n

Work with a professional<\/strong><\/strong><\/h2>\n\n\n\n

Whilst navigating what is a complex area, always seek advice from a business that understands these complexities and bear in mind that this may not be quick to resolve. When determining your residence, the advice timeline is likely to look like this:<\/p>\n\n\n\n