Beware The TOP QUALITY RESIDENCES Scam

The government is proposing new rules which come to effect from 6 April 2013 that may put UK residence for tax purposes on a statutory footing, instead of relying on HMRC guidelines and case law. In principle that is a sensible move and can provide certainty for anyone unsure at present whether they qualify as being non-resident in the UK for tax purposes. Ki Residences Singapore However the rules are complex and also have attracted some criticism because of this.

Under the current rules you’re resident in the UK in the event that you spend 183 days or more in the UK and you also could be resident if you spend more than 3 months on average. Under the new rules you will see no more four-year average and when you spend more than 3 months in the UK in any tax year you will continually be regarded as resident. As before, you should be away from the united kingdom for a complete tax year so as to qualify as non-resident and each day counts as being a day on the UK if you are at midnight on that day.

However, the new law is generally designed to leave a lot of people in the same position as previously so you are unlikely to find your situation suddenly altered. It is important though that you understand the brand new test of residence and non-residence. There are three parts of the test that have to be considered to be able. In other words, when you are definitely non-resident on the basis of Part A, then you need not consider parts B and C.

So, we think most of our clients should be still included in the provision partly A you are non-resident if you have left the UK to handle full-time work abroad and are present in the UK for less than 91 days in the tax year no more than 20 days are spent working in the united kingdom in the tax year. Here though are the three elements of the test.

Part A: You are definitely non-resident if:

You were not resident in the UK for the previous 3 tax years and within the UK for less than 46 days in today’s tax year; or You were resident in the UK in one or more of the previous 3 tax years but present in the UK for less than 16 days in the current tax year; or You have left the UK to handle full-time work abroad and provided you’re present in the UK for fewer than 91 days in the tax year no a lot more than 20 days are spent working in the united kingdom in the tax year. Training covered by your employer and used the UK will be considered work and this will be extracted from your 20 day working allowance.

Part B: You are definitely resident if:

You are present in the UK for 183 days or more in a tax year; or You have only one home and that home is in the UK or have significantly more homes and all of these are in the united kingdom; or You perform full-time work in the united kingdom.

Part C: If your position is not described in Parts A and B you then need to compare the amount of days spent in the united kingdom against a small amount of clearly defined connection factors. These connection factors are the following:

Family- your spouse or civil partner or common law equivalent (provided you are not separated from their website) or minor children are resident in the UK. Accommodation – you have accessible accommodation in the UK and employs it during the tax year (at the mercy of exclusions for some forms of accommodation). Substantive work in the united kingdom – you do substantive work in the united kingdom i.e. a lot more than forty days in the tax year but do not work full-time in the UK. UK presence in previous years – you spent more than 90 days in the united kingdom in either of the prior two tax years and you spend more days in the UK in the tax year than in any other single country.

These connection factors are then coupled with day counting to determine whether you are resident or non-resident. You can find two categories, arrivers and leavers.

If you were not resident in any of the previous three tax years – ‘Arrivers’:

Fewer than 46 days in UK: Always non-resident. 46 – 90 days: Resident if 4 or more connection factors. 91 – 120 days: Resident if 3 or more connection factors. 121 – 182 days: Resident if 2 or even more connection factors. 183 days or more: Always resident.

If you were resident in a single or more of the three tax years immediately before the tax year in mind – ‘Leavers’:

Less than 16 days in UK: Always non-resident. 16 – 45 days: Resident if 4 or more connection factors. 46 – 90 days: Resident if 3 or more connection factors. 91 – 120 days: Resident if 2 or even more connection factors. 121 – 182 days: Resident if there are 1 or even more connection factors. 183 days or more: Always resident

When the Finance Bill is produced there might be some changes to the legislation and more detail may emerge, but there’s been considerable consultation and it is sensible to prepare for the brand new rules now. If this is relevant to your situation you need to take professional advice to make sure you don’t fall foul of the brand new legislation.

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