International and Cross-border Taxation
Residence and domicile
Individual residence is determined by the statutory residence test: automatic UK tests (183 days, only home, full-time work here), automatic overseas tests, then the sufficient ties test, which weighs UK days against connecting ties (family, accommodation, work, the 90-day tie, the country tie). Split-year treatment applies on arrival and departure. Domicile is a separate common law concept (origin, dependence, choice) and historically drove access to the remittance basis for foreign income and gains. The rules in this area have been reformed recently, so always confirm the regime in force for the exam year.
Double taxation
Relief comes from a treaty or unilaterally. Treaties follow the OECD Model: the residence state generally gives credit or exemption, and the source state may withhold on dividends, interest and royalties. Article 4 tie-breakers (permanent home, centre of vital interests, habitual abode, nationality, mutual agreement) resolve dual residence. Credit relief is capped at the lower of the foreign tax and the UK tax on the same income, with excess carried forward.
Business issues
Permanent establishment (fixed place of business, dependent agent, service PE), transfer pricing at arm's length between connected parties, controlled foreign company rules, withholding taxes, the corporate interest restriction and the diverted profits tax.
Traps
Confusing residence with domicile; assuming the remittance basis charge applies to everyone; forgetting that claiming the remittance basis usually loses the personal allowance and the annual exempt amount. Always compute the treaty result and the unilateral result and compare them.
Rule of thumb
Ask three questions in order: where am I resident under domestic law, what does the treaty say, and how does the UK relieve the double tax?