Counting the days
For years, the question of whether someone was ‘resident’ or ‘not resident’ in the UK could have a big effect on their tax, but the rules were a mess – HMRC published a guide to how they decided the issue, IR 20, and then appeared to move their own goalposts in some high-profile court cases. We’re still waiting for the outcome of one of these – the taxpayers have argued all the way to the Supreme Court that HMRC’s reinterpretation of their guide was unreasonable.
Now the government proposes to tidy this up by making a clearer set of legal rules which will apply in all circumstances. The new law is supposed to come into effect from 6 April 2012. It’ll be crucial for people who emigrate or take a secondment abroad, or for those people currently living as tax exiles who have to keep a diary of days they spend in the UK.
Meanwhile, one of those people spent over 183 days in the country because his son was in hospital. He argued that this was an exceptional circumstance, but the Tribunal agreed with HMRC that he had become tax-resident.
If these issues affect you, we will be happy to go over the details – once HMRC have finalised them!