§ Mr. Lee
asked the Chancellor of the Exchequer what criteria, respectively, govern the transfer of tax domicile by United Kingdom taxpayers to the Isle of Man, the Channel Islands, the Bahamas, and the remaining dependent territories in the West Indies; how many transfers occurred to each of these territories during 1974, 1975 and 1976; if he is satisfied that no unnecessary transfers take place; and if he will make a statement.
§ Mr. Robert Sheldon
Under the tax law of the United Kingdom there are no criteria concerning the transfer of residence for income and capital gains tax purposes which are specifically related to transfers of residence to the Isle of Man, the Channel Islands, the Bahamas and the remaining dependent territories in the West Indies. These transfers are governed by the general criteria applicable in determining whether a taxpayer has or has not lost his residence or ordinary residence status for tax purposes in the United Kingdom. The Inland Revenue publishes a booklet—IR 20—which explains in detail the general rules governing residence for tax purposes.544W
No information is available concerning the numbers of taxpayers who have removed themselves from tax residence in the United Kingdom and acquired tax residence in the island territories. There is no requirement upon individuals to obtain consent for tax purposes prior to leaving the United Kingdom to take up residence abroad. The question of unnecessary transfers does not therefore arise.
The question of domicile, which is particularly relevant for the purposes of capital transfer tax, is similarly determined under the general law. The capital transfer tax legislation provides, however, that individuals domiciled in the United Kingdom are to be treated as retaining that domicile until they have been domiciled abroad for three years. If people change their United Kingdom domicile to the Channel Islands or the Isle of Man they are treated as retaining their United Kingdom domicile so long as they remain domiciled in the Islands. No information is available on the number of transfers of domicile.