New UK tax status test could hit expats | Fin24
 
  • Growing Demand

    Automaker Ford says it will be adding 1 200 new jobs and a third shift at its Pretoria assembly plant.

  • 'Deeply Upsetting'

    Dan Matjila, the former CEO of the Public Investment Corporation, has denied receiving a R5m bribe.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

New UK tax status test could hit expats

Mar 14 2013 16:05
Cape Town - Expats who spend part of the year in the UK need to reconsider the way they define their tax residency status from April, when new residency tests come into force.

HM Revenue & Customs in the UK has been consulting on changes to the residency test.

At present, it works on the basis that if you are in the UK for 183 days or more in a single tax year, or more than 90 days on average in a single tax year over the previous four tax years, you are a UK resident.

The new test will take three different aspects into account to determine your residency.

Craig Featherby, African head of independent financial advisory firm deVere Group said: "The statutory residence test (SRT) aims to remove any grey areas when determining someone's residence status for tax purposes in the UK.

"Existing rules, to a large extent, depend on cases decided by the courts.

"Currently, anyone in the UK for 183 days or more in any one tax year, or more than 90 days on average per tax year over four years, will be classified as a UK resident, and someone who spends no time in the UK is unlikely to be resident.

"However, the new SRT, which will be divided into three parts (including tests to decide if an individual is 'automatically non-resident' or 'automatically resident'), will also analyse an individual's connections with and ties to the UK.

"These include family, property, work and social connections."

The consultation period has recently ended, and tax experts expect further clarification.

However, the changes should make it easier to determine a person's tax status and where they are due to make payments.

Expats who have been overseas for some time, or those in the UK who own homes overseas, will need to reconsider where they are liable to pay taxes as a result of the changes.

united kingdom  |  tax
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
2 comments
Comments have been closed for this article.
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...