The rules that govern whether an individual is UK resident for tax purposes have always been complex with many who did not fully understand them inadvertently becoming UK tax resident. The Statutory Residence Test was introduced with effect from 6 April 2013. It was designed to clarify the residence rules and assist individuals with determining their UK residence status.
Whilst the test has brought some certainty to the area, it is not as simple to determine a residence status as was first thought - as demonstrated by the fact that it has given rise to over 100 pages of HMRC guidance as to how it operates.
Clearly whether individuals are UK tax resident or not in a fiscal year can have a profound effect upon the tax they owe to the UK authorities and those who anticipate becoming resident in the near future should ensure they obtain professional advice to structure their tax affairs in the most efficient way possible.
How can we help?
Our team can help to decipher the legislation to determine how the statutory residence test applies to a given situation. We can provide a step by step guide for individuals to ensure that their residence status is clear and we can help individuals organise their financial affairs in the most tax efficient manner prior to arrival in the UK.
Where an individual appears to be dual-resident, we can translate the appropriate double tax treaty, if applicable, to determine where the individual will be treated as tax resident.
Read more on the Statutory Residence Test on Out-Law.com.
Read more about our Tax Investigations expertise.