The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a sovereign state in Europe. Lying off the north-western coast of the European mainland, the UK is surrounded by the Atlantic Ocean to its west and north, the North Sea to its east and the English Channel to its south. It includes the island of Great Britain, the north-eastern part of the island of Ireland and numerous smaller islands.
The UK consists of four countries – England, Scotland, Wales and Northern Ireland – and has a total area of 243,000 sq km. It is the 22nd-most populous country, with an estimated 64.1 million inhabitants. Its capital city is London, an important global city and financial centre with an urban population of 10,310,000. London is one of the three “command centres” of the global economy alongside New York City and Tokyo. It is the world’s largest financial centre alongside New York and has the largest city GDP in Europe.
The UK has a high-income economy, the world’s sixth largest by nominal GDP and tenth-largest by purchasing power parity. It has been a member state of the European Union (EU) and its predecessor, the European Economic Community (EEC), since 1973; it is also a member of the Commonwealth of Nations, the Council of Europe, the G7, the G8, the G20, NATO, the OECD and the World Trade Organisation (WTO).
The UK is a constitutional monarchy with a parliamentary system of governance. The parliament meets in the Palace of Westminster and has two houses: an elected House of Commons and an appointed House of Lords. All bills passed are given Royal Assent before becoming law. Governments are elected for a fixed five-year term.
The UK has three distinct systems of law – English law, Northern Ireland law and Scots law. Both English law, which applies in England and Wales, and Northern Ireland law are based on common-law principles, such that the law is developed by judges in courts, applying statute, precedent and common sense to the facts before them to give explanatory judgements, which are reported and binding in future similar cases. Scots law is a hybrid system based on both common-law and civil-law principles.
The courts of England and Wales are headed by the Senior Courts of England and Wales – the Court of Appeal, the High Court of Justice (for civil cases) and the Crown Court (for criminal cases). A new Supreme Court of the UK was formed in 2009 to replace the Appellate Committee of the House of Lords. It is the highest court for both criminal and civil appeal cases in England, Wales and Northern Ireland and any decision it makes is binding on every other court in the same jurisdiction, often having a persuasive effect in other common law jurisdictions. The Judicial Committee of the Privy Council, including the same members as the Supreme Court, is the highest court of appeal for several independent Commonwealth countries, the British Overseas Territories and the Crown Dependencies.
HM Treasury, headed by the Chancellor of the Exchequer, is responsible for developing and executing the British government’s public finance policy and economic policy. The Bank of England is the UK’s central bank and is responsible for issuing notes and coins in the nation’s currency, the pound sterling. Pound sterling is the world’s third-largest reserve currency after the US Dollar and the Euro.
UK-source income is generally subject to UK taxation no matter the citizenship nor the place of residence of the individual, nor the place of registration of the company. UK income tax liability for individuals who are neither resident nor ordinarily resident in the UK is limited to any tax deducted at source on UK-income, together with tax on income from a trade or profession carried on through a permanent establishment in the UK and tax on rental income from UK real estate. The UK applies Value Added Tax (VAT), capital gains tax (CGT), inheritance tax (IHT) and stamp duties on properties.
Individuals who are both resident and domiciled in the UK are additionally liable to taxation on their worldwide income and gains. For individuals resident but not domiciled in the UK (“non-doms”), only income and gains remitted to the UK are taxed but, from 2008, non-doms wishing to retain the remittance basis are required to pay an annual tax.
Corporation tax is levied in the UK on the profits made by companies and on the profits of permanent establishments of non-UK resident companies and associations that trade in the EU. A company is resident in the UK if it is UK-incorporated or if its central management and control are in the UK. Double taxation of income and gains may be avoided by an applicable double tax treaty and the UK has one of the largest networks of treaties worldwide.
The UK has sovereignty over 17 territories which do not form part of the UK itself: 14 British Overseas Territories, which include Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar and the Turks and Caicos Islands, and three Crown dependencies – the Channel Islands of Jersey and Guernsey in the English Channel and the Isle of Man in the Irish Sea.