Following on from our “points of view” item on 20th October we now give some details on the proposals. In June the government initiated a consultation process in relation to a proposed statutory test for UK tax residency together with a fundamental review of the historically distinct concept of “ordinary residence”. That consultation process came to an end on 9th September 2011. We expect that the proposed changes will be incorporated into the Chancellor’s pre-budget report. We have summarised the proposals below but they are still complex. If you would like to discuss your circumstances, please contact your usual Beavis Morgan partner or Alan Ford.
NOT RESIDENT if:
Not resident in 3 previous years and here fewer than 45 days;
not resident in 1 out of 3 previous years and here fewer than 10 days;
leaving UK for full-time (35 hours minimum per week) work, and here fewer than 90 days with 20 or less on business.
183 days here;
only one home which is here (or two or more homes all here);
carry out full-time work here.
In between these absolutes
FIVE CONNECTIONS: Will be taken into account
Family – spouse and minor children resident.
Accommodation – available and used.
Substantive work – 40 days here.
Presence – 90 days here in previous year or one out of 2 preceding years.
Time – more spent here than in any other single country.
|Less than 45 days here||Non-Resident||Less than 10 days|
|45 – 89 days||Resident if 4 factors apply||10 – 44 days|
|90 – 119 days||Resident if 3 factors apply||45 – 89 days|
|120 – 182 days||Resident if 2 factors apply||90 – 119 days|
|Resident if 1 factor applies||120 – 182 days||90 – 119 days|
|183 days||Resident||183 days|