Harris Lipman News
Statutory residence test consultation launched
31/08/2011
The Government has issued a consultation document on its plans to introduce a statutory residence test to clear up current confusion regarding complex residence rules.
The plans were introduced in the March 2011 budget, where it was proposed the new test would take effect from April 2012 following a period of consultation.
Following the end of the consultation period on September 9, the Government will publish a summary of responses.
Draft legislation will then be published for further consultation before the 2012 Budget.
Under the proposals, there will be different tests for individuals arriving in the UK and those leaving the UK.
These tests have been divided into three parts; Part A for individuals who are conclusively non-resident, Part B for individuals who are conclusively residents, and Part C for other individuals whose residence will depend on a mixture of connecting factors and day counting.
It is proposed that an individual will be classed as conclusively non-resident if they meet the following conditions:
- Individuals not resident in the UK for the previous three tax years and are present in the UK for fewer than 45 days in the current tax year, or
- They were resident in the UK in one or more of the previous tax years and they are present in the UK for fewer than 10 days, or
- They leave the UK to carry out full time work abroad, provided they are present in the UK for fewer than 90 days in the tax year and no more than 20 days are spent working in the UK in the tax year.
In contrast an individual will be conclusively resident if they meet one of the following conditions:
- They are present in the UK for 183 days or more in a tax year, or
- They have only one home and that home is in the UK (or have two or more homes and all of these are in the UK), or
- Carry out full time work in the UK
Part C will apply to individuals who do not satisfy the tests outlined in Part A or B, and will focus on connecting factors to the UK combined with UK days.
For further information, please contact Harris Lipman on 020 8446 9000.
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