JonE wrote:stevensfo wrote: the thought of being taxed on the ISA dividends after almost 30 years would be an irony worthy of a Shakespearean tragedy!
Domicile is a famously tricky topic and it's made even trickier by countries using different definitions and attaching different levels of significance to one's 'domicile' so I'll make no further comment on the topic and will also assume you're a UK national.
Assuming that you are a UK citizen then the only tax significance of your domicile that I am aware of is for inheritance tax. It does not affect the annual UK income tax returns. So if you are in a situation where you are not worried about IHT then you can ignore the issue of whether the UK regards you as having UK domicile or not. There is also a process to formally change that if it does bother you. But in practice probate will happen in your new home according to their rules and not the UK's. The UK may not even know that you have died. I suspect that only a tiny proportion of British ex-pats bother to formally renounce their UK domicile because in practical terms it won't affect anything.
JonE wrote:Whether one is tax-resident in the UK for a tax year has been determined by the Statutory Residence Test since April '13.
https://www.gov.uk/government/publicati ... e-test-srtAs already hinted, to claim relief from UK income tax on UK income if you reside in a country having a DTA with the UK you need to get a 'certificate of overseas residence' from the taxman where you reside confirming that you are resident there according to their laws and submit that to HMRC. Rules governing my DT-I provided that it had to be submitted by my local tax office direct to HMRC (once I'd paid the stamp duty on the document).
Those dividends within your ISA wrapper will continue to be protected for UK tax purposes so I'd have thought the easiest and cleanest no-hassle approach is to arrange matters such that you are formally tax resident in a country having a DTA with UK which doesn't tax you on dividends and, preferably, not on interest or capital gains on shares either.
I would have thought that the "easiest, cleanest, no-hassle approach" (if not the most impeccable) is to just leave the UK and take with you whatever assets would be taxable. Then there would most likely be no UK tax to pay anyway since there would be no UK income. You would avoid UK tax simply by not having any income in the UK, and by not being resident in the UK.
The ISA could stay if you wanted since that is not subject to UK tax anyway. But I would probably close it, cash it out and reinvest it in whichever local offshore financial centre was convenient for my new homes (e.g. Gibraltar if I were in Spain). I would do that partly to ensure I have no assets left in the UK and partly because, in theory anyway, that ISA income might be taxable in my new home.
The principle would be to leave nothing in the UK. Obviously that would involve you selling any home you have in the UK, moving investments etc. The only problem is if you receive a UK pension that exceeds the tax-free band, then you are more stuck. In my case it will just be a state pension of 175 a week and that is not enough to attract UK tax anyway. I might leave a UK bank account open to receive that along with a UK brass plate address.
It would be interesting to know, of all the people who permanently emigrate from the UK, what percentage go through all the formal steps you describe, and what percentage just leave, do not notify UK authorities, and simply drop off the radar. In practice if the UK has no jurisdiction over you then it just ignores you, unless you are a celebrity or billionaire anyway.
My aim would eventually be to get a foreign passport and then let my UK passport expire. That would presumably end my UK domicile as well. It would be amusing to enter the UK on a foreign passport as if I had never been in the UK before.