UK and International Tax news

Consultation On A Statutory Definition Of Tax Residence

Tuesday 21st June 2011

HM Treasury has recently published a consultation document on its plans for a statutory residence test.  There is currently no full legal definition of tax residence, with the result that the rules are unclear, complicated and seen as subjective.   This creates uncertainty for individuals about their residence status and is a deterrent to businesses and individuals considering investing in the UK.   The consultation proposes a framework for the test and seeks views on its design and implementation, in order to address these issues.

This consultation will only cover the issue of tax residence in the UK for individuals and will not cover the residence of companies.

HMRC is considering the possibility of providing an interactive online tool to enable individuals to self assess their residence status when the new statutory definition is introduced.  A prototype of this tool is now available and interested parties are invited to make use of this to assess how a statutory test could operate in practice. 

The consultation will close on 9 September 2011.  A summary of responses will be published in the autumn.  Draft legislation will be published for comment later in 2011 with a view to including final legislation in Finance Bill 2012.

If you would like further details on the consultation, please contact Keith Rushen on 0044 (0)20 7486 2378.

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