More news on the UK Statutory residence test.

[fifi]

Island Connections article.



06.08.2012 - Blevins Franks Financial Correspondent

We finally have some more information on the new UK statutory residence test, following the consultation period which ended last September.

The test is due to start on April 6, 2013 and will determine whether or not an individual is liable for UK income and capital gains tax, wherever they arise. The Treasury has released draft legislation that builds on the responses received. It remains committed to the original structure, though there have been some small changes The distinction between 'leavers' (individuals who were UK resident in one or more of the previous three tax years) and 'arrivers' (not resident in all of the previous three tax years) remains, and there are different rules for each category. The test breaks down into three parts. Part A lays out a conclusive position whereby an individual will always be non-UK resident, while Part B lists the circumstances under which you would always be considered UK tax resident. If you are a leaver and spend less than 16 days a tax year in the UK (previously 10 days), or you are an arriver and spend fewer than 46 days, then you are not UK resident. If however your only home/s is in the UK, or you spend 183 days or more there a year, you are UK resident. If neither test is conclusive, Part C will determine whether or not you are UK resident for tax purposes. The test outlines five connecting factors which are combined with day counting into a 'scale' to determine your residence status. Connecting factors: 1) Family in the UK - spouse/civil partner and/or children who are minors. 2) Available accommodation in the UK. 3) Substantive employment in the UK. 4) UK presence in previous years – if you have been UK resident for more than 90 days in either of the previous two UK tax years. 5) More time spent in the UK in the tax year than any other single country Each factor is subject to its own specific criteria and can be complex. The scales are now as follows: Leavers Number of days that make you UK resident Connecting factors 16-45 4 factors 46-90 3 factors 91-120 2 factors 121-182 1 factor 183 or more Always resident Arrivers Number of days that make you UK resident Connecting factors 46-90 4 or more factors 91-120 3 factors 121-182 2 factors 183 or more Always resident The government believes the draft legislation is close to being the final version. Another consultation period on the new proposals is running until mid-September 2012. While the statutory residence test will provide much more certainty for expatriates and is a welcome improvement on the current situation, the fine detail in the legislation could trip many people up, so for peace of mind you should take advice from an international tax and wealth management firm like Blevins Franks. The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice. To keep in touch with the latest developments in the offshore world, check out the latest news on our website www.blevinsfranks.com You may also contact our partner Paul Montague on Tel: 922 716 079 or Email: paul.montague@blevinsfranks.com

[TamaraEnLaPlaya]

Good news - the extranjero/foreigners' residency doc has now gone to a credit card sized piece of paper/card instead of the A4 certificate. Still the same pale green. The card is actually a 'push-out' from an A4 doc - the police keep the remainder of the doc. 

[admin]

Good news - the extranjero/foreigners' residency doc has now gone to a credit card sized piece of paper/card instead of the A4 certificate. Still the same pale green. The card is actually a 'push-out' from an A4 doc - the police keep the remainder of the doc. 

Does it bear a photo?

[TamaraEnLaPlaya]

Nope - no photo, so it still needs to be supported by a passport or national ID card for most things, but a step in the right direction!