This implies that for individuals, the legal responsibility for paying UK income tax of a taxpayer who is neither a resident nor a typical resident in the UK is limited to any amount of tax subtracted at source on UK salary, along with the tax on income from a business or trade kept on through a permanent institution in the UK and tax on rental income from any real estate in the UK.

Meanwhile, those individuals who are both resident and domiciled in the UK are also subject to UK taxation on their worldwide profits and income. For a taxpayer who is resident but not domiciled in the UK, referred to as a “non-dom”, profits and foreign income have been taxed traditionally on the remittance basis, which means that only the profits and income are subject to taxation in the UK. However, beginning last April 6, 2008, a non-dom who wants to maintain the remittance basis is obligated to pay a tax of £30,000 every year.

“Domicile” here has a strict definition. Any individual is said to be domiciled in the UK if his or her place of residence is his or her permanent home. A company is said to be “resident” in UK if it is integrated in the UK or it its main administration and jurisdiction is in the UK.