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New tax rules introduced for expats returning to the UK
New tax rules introduced for expats returning to the UK
| Published: | 15 Feb at 9 AM |
British expats who are thinking of spending time in the UK are being advised to become familiar with new rules to be introduced in April that could affect their tax status. The Treasury announced the Statutory Residence Test in 2011 which will calculate how many days an expat is allowed to return home for before becoming liable for UK taxes.
The three-part assessment has been introduced in an attempt to clarify complicated legislation concerning residential status. If that status remains unclear after the first two tests a third will be used to examine connections including family, property and work.
The tests have been introduced as a way of cracking down on those who may be bending the rules to avoid paying tax in Britain. The current rules define a resident as someone who stays in the UK for more than 183 days in any single tax year or who has spent more than an average of 90 days in the country each year over a period of four years.
To be classed as a non-resident and spend longer in the UK expats will need to prove that they have fewer ties to the country. According to Price Waterhouse Coopers the change in legislation is the most significant in tax residence rules in the UK for more than a century.
Expats considering returning should plan ahead and keep a clear record of the time they spend in the UK, the accountancy firm said.
The three-part assessment has been introduced in an attempt to clarify complicated legislation concerning residential status. If that status remains unclear after the first two tests a third will be used to examine connections including family, property and work.
The tests have been introduced as a way of cracking down on those who may be bending the rules to avoid paying tax in Britain. The current rules define a resident as someone who stays in the UK for more than 183 days in any single tax year or who has spent more than an average of 90 days in the country each year over a period of four years.
To be classed as a non-resident and spend longer in the UK expats will need to prove that they have fewer ties to the country. According to Price Waterhouse Coopers the change in legislation is the most significant in tax residence rules in the UK for more than a century.
Expats considering returning should plan ahead and keep a clear record of the time they spend in the UK, the accountancy firm said.
