Living Outside The UK? New UK Residence Rules Announced!

04.07.11

Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

Here is some really good news for retired UK expatriates who have been struggling with the UK?s 90 days residence rule. Under Treasury proposals, the rule is being made much clearer a

Here is some really good news for retired UK expatriates who have been struggling with the UK?s 90 days residence rule.

Under Treasury proposals, the rule is being made much clearer and much easier. Most retired expatriates will now be able to spend up to 119 days in the UK in each UK tax year, yet remain outside of HM Revenue & Customs? clutches.

The booklet HMRC 6 (which replaced IR20) will be torn up.

If these new rules are implemented, they will commence on 6th April 2012.

For example, if you are retired and have been non-UK tax resident for the previous three UK tax years ending 5th April 2012, then you will be able to spend up to 119 days in your UK home without being deemed as a UK tax resident. This assumes that:

1. Your spouse/partner is not UK tax resident nor are your children under 18 years old UK resident.

2. You have a home outside of the UK as well as your UK one.

3. You no longer work.

You can even spend up to 182 days in the UK if in each of the two previous UK tax years you have spent less than 90 days in the UK.

A day is counted only if you are in the UK at midnight.

If just one of the factors 1, 2 or 3 above were breached, then you would be limited to 89 days in the UK. If two of those factors were breached, you could be limited to 44 days.

The rules above are those for someone ?Arriving? in the UK, defined as someone who has not been a UK tax resident for each of the previous three UK tax years. The rules for somebody who is a UK ?Leaver? are a little tougher.

If these draft proposals are approved, the new rules are a major advance in providing certainty for individuals who have homes in the UK and visit there frequently.

This article only summarises some of the key points in the rules and is not meant to be a full explanation. Please contact us for advice specific to your own circumstances.

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.

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; individuals should seek personalised advice.

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