The importance of obtaining treaty tax residence overseas

The application of the residence rules in recent Commissioners decisions has made it even more important to establish treaty residence overseas wherever possible. In these cases the position was essentially clarified in that the Commissioners and the Revenue can class you as remaining UK resident even if you only spend a short time in the UK (see articles such as Non UK residence in 2007). In this case it is clear that if you also spend significant periods overseas you could establish tax residence there are well. In such a case, reviewing any relevant tax treaty is vital. If there is a treaty there will usually be a tiebreaker clause which you can use to determine which country you are treaty resident in. Provided you can establish treaty residence overseas you can then apply the provisions of the treaty on the basis on you being non UK resident (eg as regards pensions etc). Note though you'll still remain UK resident for domestic law purposes. We've gone through the application and use of treaty residence in more detail in this article: Offshore tax article - Tax treaty residence and why it can be important in reducing your UK tax liability This should fill you in on what you need to know in relation to establishing your treaty residence (for individuals).