Prem Sikka can't resist having a dig at Lord Ashcroft's revelation that he is non-domiciled for tax purposes over at Comment is Free.

Lord Ashcroft's statement sets out the March 2000 undertakings he gave to William Hague MP, the then leader of the Conservative party, that he would "take up permanent residence in the UK again" by the end of that year. Now, some ten years later, he says that this meant as "a long-term resident"

HMRC recognises only three types of residency - 'resident', 'ordinarily resident' and 'domiciled'. The media might interpret 'permanent residence' as domicile, but that's not really what domicile is. It's basically where you intend to die. If you're born in the UK and have never lived anywhere else, then you're not going to be able to argue that you're domiciled anywhere other than the UK. If, however, you've lived a fair amount of your life elsewhere, have extensive business interests and property in another country and, say, have a burial plot there, then you can claim domicile there.

If not ordinarily resident in the UK or not domiciled in the UK, then you can use the remittance basis to tax your non UK-sourced income. This means it's only taxed when you bring it into the UK, not when it's earned. People who can't use the remittance basis must pay UK tax on their worldwide income.

Residence and domicile are totally different concepts. It's incredible that a professor of accounting at a UK university could get them muddled up.

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Filed under: Current issues, Politics, Taxation with tags domicile, guardian, idiots, lord ashcroft, prem sikka