Are you a UK resident?

HMRC has revised its guidelines to determine who is and who isn't a UK resident for tax purposes.

The fresh guidance covering residence and domicile follows HMRC's recent successes in a number of tax cases. The details are contained in a new booklet, HMRC 6 - essential reading for anyone thinking of coming to or leaving the UK.

Factors that count

The new guidance makes it much clearer that simply going abroad doesn't necessarily mean you will become non-UK resident for tax purposes. It also stresses that the number of days spent in the UK, while important, is not conclusive. The exception is for those spending more than 182 days in the UK in a particular tax year. Other factors - such as keeping property in the UK, where your family will be living, and the length and number of visits to the UK - will also be taken into account.

‘Visit' definition

There is also a detailed explanation of what constitutes a 'visit' to the UK - including the position of those who may simply be passing through. And any business or social activities conducted here will count as days in the UK.

For those working abroad there is more specific guidance on what HMRC considers ‘full time work' and how it views the position if the original employment ends and a new employment begins.

Guidance not law

As well as how to determine domicile for tax purposes, you can find out how the remittance system works. Both are highly complex and the guidance can only scratch the surface. There is no substitute for obtaining professional advice.

It's also clear from recent tax cases that the guidance does not represent law. HMRC may still litigate in appropriate cases, even if HMRC6 has been followed.

If you wish to discuss your residence or domicile position in detail, please contact your usual Littlejohn tax adviser or email senior tax consultant Barry Luscombe at bluscombe@littlejohnllp.com