Residence matters....... continue to evolve and so does the threat of a costly HMRC challenge so do make sure that you stay a step ahead at all times. Are you fully up to date with the all of the requirements, particularly concerning your visits- do see the News section and or contact us directly for further details.
Do you have the complete picture from the tax case of Robson v Dixon in 1972 through to Shepherd in 2005 and then that of Gaines -Cooper and Grace to date along with the latest proposals for a Statutory Residence Test with effect from 6/4/13?
What about HMRC current practice along with the application of concessions and legislation?
Are you already living abroad or thinking of doing so, or indeed considering a return to the UK?
Need tax planning advice in relation to such a move?
Happy with your duty time calculation?
Looking for a tax health check?
Self Assessment Tax Return completion?
Letting UK property as a Non Resident Landlord and require an approval certificate for receipt of gross rents pending submission of ''tax adjusted'' rental accounts ?
Facing a challenge from the HMRC regarding your claim?
We can help in all respects so if you want to make sure and plan ahead then simply ask us to review your individual circumstances and comment further upon the latest position for you. Contact Us
Grace Tax Case
A rather tortuous passage for Lyle Grace, via the Special commissioners in 2007 and appeal by HMRC in 2008, countered by referral to the Court of Appeal in 2009, matters were handed back to the new Tribunal process for hearing in November 2010 with published findings on the 5/1/11.
In short, Mr Grace a British Airways pilot was present for part of a year in UK for purpose of his employment –owning and occupied two properties, one in the UK and one in South Africa – held to be Resident and Ordinarily Resident in UK for the years at issue.
Clearly it was, in our opinion, primarily the combination of ongoing UK substantial duties coupled with the use of available UK living accommodation – albeit amongst other factors that led to this outcome.
The full adjudication provides a relevant summary of the numerous considerations for Aircrew concerning UK Tax Residence. Whilst each case will continue to be judged upon its own full facts and individual merits, HMRC still concede that if you leave the UK permanently or indefinitely then working for a UK employer and performing some UK substantial duties does not in itself prevent a Non Residence claim - providing that other connections with the UK are reduced sufficiently to demonstrate and uphold a clear “distinct” break.
Limitations of less than 183 days in any one tax year and no more than 90 days per annum on average taken from Legislation and HMRC practice derived from earlier tax cases.
General practice prior to 5/04/08 was to discount the day of arrival and departure and from then onwards to count “midnights” in UK. Indeed whilst on the one hand HMRC seem to indicate no change - and hopefully so for those clearly living abroad - they evidently along with the courts reserve the right, as and when it suits, to compare actual days / time present in the UK to the midnight count in order to gain a more complete picture. (As per the Grace case and revised HMRC6 publication.)
The concession regarding days in the UK due to exceptional circumstances has not changed but frankly apart from say the global impact of the volcanic ash disruption or war it is simply best not relied upon.
Exemption for those in transit which may span a midnight providing no business activity is undertaken whilst in the UK - does not apply to working Aircrew transiting the UK engaged upon working flights.
HMRC6 – Basic Residence Guidance
"There are many different factors which will determine whether you are resident in the UK. With one exception (ie 183 day limit), it is not simply a question of the number of days you are physically present in the UK during a tax year, although this is an important consideration. If you spend very significant amounts of the year travelling internationally, you should keep a record both of the days you were present in the UK and of those days where you are here at midnight. Both will be factors when looking at the pattern and purpose of your visits.”
“Leaving the UK ‘permanently’ means that you are leaving the country to live abroad and will not return here to live. Leaving ‘indefinitely’ means that you are leaving to live abroad for a long time (at least three years) but you think that you might eventually return to live here, although you do not currently have plans to do so.
The act of leaving the UK does not necessarily make you not resident and not ordinarily resident. You must also make a definite break from the UK and any remaining ties you have with the UK must be consistent with not being resident here. If you say that you are no longer resident and ordinarily resident in the UK, we might ask you to give some evidence to show that you have left the UK
permanently or indefinitely and that there has been a clear change in the pattern of your life. For example, we would expect you to show that when you left the UK you had acquired accommodation abroad to live in as a permanent home.”
Below is also a link to HMRC publication HMRC6 covering basic Residence guidelines but frankly this in isolation should not be relied upon as they will always ultimately refer back to the tax cases and the actual facts of your own particular circumstances....