Networth
Expats beware: New UK tax residency tests
- Published: 17 Feb 2013 at 00.00
- Newspaper section: Spectrum
New and complex rules relating to tax residency in the United Kingdom have been proposed. By allowing more specific determination of tax residency, they add clarity but cast the tax net wider. So, who is the beneficiary here: you or the UK taxman?
The articles regarding tax over the past two weeks have raised many eyebrows. A lot of individual expats are wondering how they will be treated under new regimes used by governments to reach out and net expats living abroad. Some readers expressed their thoughts while others had additional questions about the specifics of the new proposed UK statutory residence test and state pension regulations. These separate subjects were often raised in the same inquiry.
The new UK tax residency test system has been designed to be much more specific, as in the past we often saw rules manipulated to the advantage of the individual. This culminated in the Gaines Cooper case, which Her Majesty's Revenue and Customs (HMRC) won, and was a landmark used as a major test of residence and abuse of tax rules. The judgement created a need for review and streamlining when determining an individual's residency for taxation in the UK.
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