Remittance Basis vs ILR / Citizenship

[JJ88]

I am a non-domicile, retired person came to the UK in 2020. I carefully structure my wealth before coming to the UK.

I will apply ILR and Citizenship a few years later. I reported my self assessment using arising basis and I brought enough money to the UK for my living during the tax year 2020/2021. I also live in my own house. Therefore, I do not need to bring more money from overseas for the next 10 years even though I have no local income from within UK. By the time I apply ILR and Citizenship, I expect that I will still have, say GBP500k, savings in my bank's no interest current account.

For tax years 2021/2022 to 2024/2025, I have 2 choices:
A. If I report my tax using arising basis, I will need to pay some tax for my only incomes from overseas.
B. If I report my tax using remittance basis, I will need to pay no tax because I remit no fund to the UK.

My question is: Will my ILR / Citizenship application be negatively affected if I choose (B) claim the Remittance Basis (and pay no tax as a result)?

Note: Someone told me that if I pay no tax by claiming Remittance Basis, it means I have no contribution to the UK. (I do not agree this view). Therefore, I will have consequences when I apply my ILR / Citizenships.

[alterhase58]

For citizenship there are no financial requirements, such as how much tax/NI you pay, how much or how little you earn or any benefits you have claimed. Others will be able to comment on ILR requirements.

[CR001]

For ILR, it really depends what visa you are on as you have not stated this at all in your post. Different visas have different requirements.

[JJ88]

CR001 wrote:
"For ILR, it really depends what visa you are on as you have not stated this at all in your post. Different visas have different requirements."

Thank you alterhase58 and CR001!

I have a BNO Visa and I do not see any financial requirements for applying ILR.

Ref: https://www.gov.uk/british-national-ove ... -in-the-uk

[secret.simon]

I think (and this is solely my opinion. I have no government guidance or document that I can pray in aid), that being non-domiciled can be a problem when it comes to applying for British citizenship.

British citizenship has a future intentions requirement, that you intend to reside and settle in the UK. The concept of Domicile is very similar, where do you intend to settle in the long-term.

A non-domiciled person is in effect stating that they do not intend to reside in the UK, something that is at complete odds with the future residence requirements.

This withdrawn document on the Gov.UK website gives an idea of the concept of domicile and how it is assessed.

More information on the future intentions requirement is in the Naturalisation as a British citizen caseworker guidance, from Page 29.

I'd suggest that the OP consult both a lawyer specialising in naturalisation law and domicile AND a good accountant with an understanding of non-dom and domicile status.

[JJ88]

Good point secret.simon, I never thought about it!

It is hard to plan for too long. What if my plan is to stay here in the UK for at least 10 years. I don’t know how long I will live but I will eventually die in the UK and expect to pay 40% of inheritance tax. In between, I want to live somewhere else, say 12 years later living in Malyasia if I can get their MM2H. Do you think it is acceptable to claim my intention is to stay in the UK when I applying my citizenship, at the same time still claiming Non-domiciled for Remittance Basis?

Note: As a BNO Visa holder, I can apply my citizenship in the 6th to 7th year of my stay in the UK.

[secret.simon]

Do you think it is acceptable to claim my intention is to stay in the UK when I applying my citizenship, at the same time still claiming Non-domiciled for Remittance Basis?

I personally would find it contradictory. How do you reconcile "Don't tax me as I do not intend to reside in the UK in the long-term" with "Make me a citizen as I intend to reside in the UK in the long-term"?

On the other hand, I am not a Home Office caseworker or a lawyer or a tax accountant and my advice/interpretation is that of a random stranger on the Internet.

I think you should consult a lawyer specialising in both naturalisation and non-dom tax affairs.

[JJ88]

Thank you for your reply.

A government tax adviser redirected me to a Remittance Basis Specialist who answered my question today. She said that choosing Remittance Basis is totally ok if I do not have UK income and I do not bring in the overseas income to the UK. Choosing Remittance Basis will not affect my future Citizenships or ILR application.

Regarding your comment, I personally think that both the terms “intend” and “long-term” can be very subjective in my case. For “Domicile”, I really think that my domicile should belong to my home country, at least until I got accepted to be a citizen to another country.