Posted by Nick Day on 14 Dec 2012
UK Statutory Residence Test – Update
Draft legislation has been issued bringing the long awaited Statutory Residence Test (SRT) a step closer.
After 18 months of consultation the draft law has not altered much from the previous proposed version of the rules but one welcome relaxation is that individuals claiming to be non-resident by virtue of “working full-time abroad” will in broad terms from 6 April 2013 be able to spend up to 30 days working in the UK in each tax year without losing their non-resident status.
Tax Innovations welcomes the clarity that a definitive set of tests should bring for both individual and employers with expatriate employees.
Also welcome is the fact that most non-domiciled individuals relocating to the UK will be able to continue enjoying the advantages of claiming “Overseas Work Days Relief”, and hence avoid UK income tax on earnings relating to non-UK employment duties, despite the abolition of “Ordinary Residence” as a concept from 6 April 2013. Certain detailed planning will still be required to claim this relief.
However, “Brits abroad” who claim to be non-resident will need to examine the new SRT rules in detail to determine their status from 6 April 2013. Care will be needed by this group of individuals as the new rules will be tougher to satisfy for them, depending on their circumstances.
To view our detailed summary of the draft law click here.
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