Residence - tax implications

[Charlie]

How long does one have to be out of the UK to lose UK tax residence? And does one have to be out completely for the first year or is it OK to return periodically during the first year providing the 90 days average per year rule is observed?

Charlie

[accountant@uktaxshop]

Charlie,

Taken from the IR site


"Q.1 In what circumstances would I become non-UK resident if I left the UK?

"A. Normally if you leave the UK permanently or for 3 years or more or to work abroad full-time, you will become not resident and not ordinarily resident in the UK if your absence from the UK covers a complete tax year (i.e. 6 April to
5 April), and you spend less than 183 days in the UK during the tax year, or your visits to the UK do not average 91 days or more a tax year over a maximum of 4 years. (For visits to the UK, days of arrival and departure are not normally counted as days spent in the UK.)


Regards

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436

[Charlie]

Thank you, James. So if I leave the UK to become an expatriate retiree on, say, 1 October 2003 I could return permanently on 1 October 2006 and still retain non-residence for those 3 years providing I have observed the average of 90 days per year rule in the UK - is that right? Incidentally, how does the IR know if one is here for only 90 days a year? What's to stop a less than honest person hopping across the channel to the UK via ferry or tunnel whenever the whim takes her?

[Ian McTernan CTA]

Please note there are other rules involved if you are thinking about CGT, and I for one wonder about the question asked, perhaps you could advise why this question has arisen?

On your last point, the declaration you sign on your Tax Return runs along the lines of 'I declare that the information contained therein..is complete and correct, etc.' so if you sign a Return and make a false declaration, you are committing an offence and can be punished accordingly...you could compare your comment to 'what's to stop me stealing'- the answer is the same effectively- it's the law!

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
Ian@imcternan.com