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Readers' forum: Transatlantic

22 January 2019
Issue: 4680 / Categories: Forum & Feedback

Consequences of tax treaty tie-breaker test.

My client is a US citizen who splits his time between the US and the UK. Under the statutory residence test he is a UK resident but under the tie-breaker rule in the UK/US double tax treaty he falls to be treated as a US resident. I am not clear on the UK tax consequences of being a US resident under the treaty. HMRC’s International Manual says: ‘Although the agreement overrides some of the normal consequences of being a UK resident it does not in the case of an individual override the fact of UK residence itself for purely domestic law purposes’ (see

As an example my client has some UK bank interest. The double tax treaty would indicate that the US has exclusive taxing rights so the interest is not taxable...

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