The Secret Of TOP QUALITY RESIDENCES

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

Ki Residences Singapore 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 90 days on average. Under the new rules you will have no more four-year average and when you spend more than 90 days in the UK in any tax year you will always be considered to be resident. As before, you should be away from the united kingdom for a complete tax year to be able to qualify as non-resident and a day counts as being a day on the UK when you are at midnight on that day.

However, the new law is generally designed to leave a lot of people in the same position as previously and that means you are unlikely to find your position suddenly altered. It is necessary though that you understand the new test of residence and non-residence. You can find three parts of the test that have to be considered to be able. In other words, if you are definitely non-resident on the basis of Part A, then you need not consider parts B and C.

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

Part A: You’re 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 were resident in the UK in a single or more of the previous 3 tax years but present in the UK for fewer than 16 days in the current tax year; or You have gone the UK to handle full-time work abroad and provided you were present in the united kingdom for fewer than 91 days in the tax year and no a lot more than 20 days are spent working in the united kingdom in the tax year. Training paid for by your employer and taken in the UK will be considered work and this will be extracted from your 20 day working allowance.

Part B: You are definitely resident if:

You are present in the united kingdom for 183 days or more in a tax year; or You have only 1 home and that home is in the united kingdom or have significantly more homes and all of these are in the UK; or You perform full-time work in the UK.

Part C: If your situation isn’t described in Parts A and B then you need to compare the quantity of days spent in the united kingdom against a small number of clearly defined connection factors. These connection factors are the following:

Family- your spouse or civil partner or common law equivalent (provided you are not separated from them) or minor children are resident in the UK. Accommodation – you have accessible accommodation in the united kingdom and employs it during the tax year (at the mercy of exclusions for some forms of accommodation). Substantive work in the united kingdom – you do substantive work in the UK i.e. more than forty days in the tax year but usually 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 united kingdom in the tax year than in any other single country.

These connection factors are then combined 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 – 3 months: Resident if 4 or even more connection factors. 91 – 120 days: Resident if 3 or 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 even more of the three tax years immediately before the tax year in mind – ‘Leavers’:

Fewer than 16 days in UK: Always non-resident. 16 – 45 days: Resident if 4 or even more connection factors. 46 – 90 days: 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 more connection factors. 183 days or more: Always resident

Once the Finance Bill is produced there may 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 brand new rules now. If this is relevant to your situation you should take professional advice to make certain you do not fall foul of the new legislation.