7 Ways To Keep Your TOP QUALITY RESIDENCES Growing Without Burning The Midnight Oil

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

Under the current rules you are resident in the UK in the event that you spend 183 days or more in the UK and you also could be resident if you spend more than 90 days on average. Beneath the new rules you will have no more four-year average and when you spend more than 3 months in the UK in virtually any tax year you will always be regarded as resident. As before, you need to be away from the UK for a complete tax year in order to qualify as non-resident and a day counts to be a day on the UK if you are at midnight on that day.

However, the new law is normally designed to leave most people in exactly the same position as previously so you are unlikely to find your position suddenly altered. It is necessary though that you understand the brand new test of residence and non-residence. You can find three sections of the test that have to be considered in order. In other words, in case 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 in Part A that you are non-resident when you have left the UK to handle full-time work abroad and so are present in the UK for less than 91 days in the tax year and no more than 20 days are spent working in the UK 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 within the UK for under 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 within the UK for fewer than 16 days in the current tax year; or You have left the UK to carry out full-time work abroad and provided you were 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. Ki Residences Singapore Training covered by your employer and taken in the UK will undoubtedly be considered work and this will undoubtedly be extracted from your 20 day working allowance.

Part B: You’re definitely resident if:

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

Part C: If your situation is not described in Parts A and B then you need to compare the quantity of days spent in the UK 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 aren’t separated from their website) or minor children are resident in the UK. Accommodation – you have accessible accommodation in the UK and employs it during the tax year (at the mercy of exclusions for some types of accommodation). Substantive work in the UK – 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 united kingdom. UK presence in previous years – you spent a lot more than 90 days in the UK 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 coupled with day counting to determine whether you’re resident or non-resident. You can find two categories, arrivers and leavers.

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

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

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 in fact it is sensible to prepare for the brand new rules now. If this is relevant to your situation you need to take professional advice to ensure you do not fall foul of the brand new legislation.

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