What You Should Have Asked Your Teachers About TOP QUALITY RESIDENCES

The government is proposing new rules which come to effect from 6 April 2013 that may put UK residence for tax purposes on a statutory footing, instead of relying on HMRC guidelines and case law. In principle it is a sensible move and will provide certainty for anybody unsure at present if they qualify as being non-resident in the UK for tax purposes. Nevertheless the rules are complex and have attracted some criticism for this reason.

Under the current rules you’re resident in the UK if you spend 183 days or more in the UK and you could be resident if you spend more than 3 months on average. Ki Residences Singapore Beneath the new rules there will be no more four-year average and if you spend more than 90 days in the UK in virtually any tax year you will continually be regarded as resident. As before, you need to be away from the united kingdom for a complete tax year to be able to qualify as non-resident and each day counts to be a day on the UK if you are here at midnight on that day.

However, the new law is generally designed to leave a lot of people in the same position as previously which means you are unlikely to find your position suddenly altered. It is vital though that you understand the brand new test of residence and non-residence. There are three sections of the test that have to be considered to be able. In other words, when you are definitely non-resident based on Part A, then you don’t have to consider parts B and C.

So, we think most of our clients should be still covered by the provision partly A that you are non-resident assuming you have left the UK to handle full-time work abroad and so are present in the united kingdom for fewer than 91 days in the tax year and no a lot more than 20 days are spent employed in the united kingdom in the tax year. Here though are the three parts of the test.

Part A: You are definitely non-resident if:

You were not resident in the united kingdom for the previous 3 tax years and present in the UK for less than 46 days in today’s tax year; or You’re resident in the UK in a single or more of the previous 3 tax years but within the UK for less than 16 days in today’s tax year; or You have gone the UK to carry out full-time work abroad and provided you were present in the UK for less than 91 days in the tax year and no a lot more than 20 days are spent working in the UK in the tax year. Training paid for by your employer and used the UK will undoubtedly be considered work and this will undoubtedly be taken from your 20 day working allowance.

Part B: You are definitely resident if:

You are present in the UK for 183 days or even more in a tax year; or You have only one home and that home is in the UK or have significantly more homes and all of these are in the united kingdom; or You carry out full-time work in the united kingdom.

Part C: If your situation isn’t described in Parts A and B then you need to compare the amount of days spent in the UK against a small amount of clearly defined connection factors. These connection factors are as follows:

Family- your spouse or civil partner or common law equivalent (provided you aren’t separated from them) or minor children are resident in the united kingdom. Accommodation – you have accessible accommodation in the UK and employs it through the tax year (subject to exclusions for some forms of accommodation). Substantive work in the UK – you do substantive work in the UK i.e. a lot more than forty days in the tax year but do not work full-time in the UK. UK presence in previous years – you spent a lot more than 90 days in the united kingdom in either of the previous two tax years and you also spend more days in the UK in the tax year than in virtually any other single country.

These connection factors are then coupled with day counting to find out whether you’re resident or non-resident. There are two categories, arrivers and leavers.

If you were not resident in any of the prior three tax years – ‘Arrivers’:

Less than 46 days in UK: Always non-resident. 46 – 90 days: Resident if 4 or even more connection factors. 91 – 120 days: Resident if 3 or even more connection factors. 121 – 182 days: Resident if 2 or even more connection factors. 183 days or even more: Always resident.

If you were resident in a single or more of the three tax years immediately before the tax year under consideration – ‘Leavers’:

Less than 16 days in UK: Always non-resident. 16 – 45 days: Resident if 4 or even more connection factors. 46 – 3 months: Resident if 3 or even more connection factors. 91 – 120 days: Resident if 2 or even more connection factors. 121 – 182 days: Resident if there are 1 or even more connection factors. 183 days or more: Always resident

When the Finance Bill is produced there could be some changes to the legislation and more detail may emerge, but there’s been considerable consultation and it is sensible to prepare for the new rules now. If that is relevant to your situation you need to take professional advice to ensure you do not fall foul of the new legislation.

Leave a Reply

Your email address will not be published. Required fields are marked *

*