Statutory Residency Test

[thehiker99]

The government announced in this budget, just past, that they will be bringing in a Statutory Residency Test, from April 2012.

Would anyone like to speculate on the form this might take?
Is it likley to increase/decrease the number of days expats are allowed into the UK in a year?

Do the tax gurus on this site think (or have perhaps heard on the grapevine) that there will still be, post 2012, a clear case for people in full time overseas employment, or will that perhaps be dropped, and the only way to achieve non residence status will be the "cut all ties" route?

Worse still, will we move towards the US system of being taxed on your worldwide income, simply for having the passport?

Le Randonneur 99

[section 44]

Is it likley to increase/decrease the number of days expats are allowed into the UK in a year?

You imply that the law currently prescribes a specific number of days that expats are allowed in the UK. That is not the case.

Worse still, will we move towards the US system of being taxed on your worldwide income, simply for having the passport?

I doubt it.

[maths]

Is it likley to increase/decrease the number of days expats are allowed into the UK in a year?

Decrease.

Do the tax gurus on this site think (or have perhaps heard on the grapevine) that there will still be, post 2012, a clear case for people in full time overseas employment, or will that perhaps be dropped, and the only way to achieve non residence status will be the "cut all ties" route?

"Cut all ties" route won't work as a simple and only test of non-residence. Full time working abroad option may be kept, but unlikely.

Worse still, will we move towards the US system of being taxed on your worldwide income, simply for having the passport?

No.

Only clarity can be achieved by a simple arithmetic approach based on number of days in UK.

USA approach possible; broadly, a weighted average of days over a 3 tax year period.

But, eh, what do i know....

[section 44]

Only clarity can be achieved by a simple arithmetic approach based on number of days in UK

Unlikely. HMRC are reluctant to provide answers when taxpayers/practitioners look for arithmetic lines to drawn when anything depends on fact and degree. Given that there would be some who would push any arithmetic test to its limits, legislation would surely not provide a high figure. Even what amounts to a single day in the UK may have to be reconsidered. A strict arithmetic test rather than something that relies on fact and degree, and established case law principles, would be open to abuse.

[Michael I. Atlas, CA]

But you could have what we have in Canada: BOTH

Namely, under Canadian tax law, residency is generally based on UK common law residency and ordinarily resident concepts (ties, settled routine of life, etc.).

However, ON TOP OF THAT, we also have a rule that DEEMS a person to be resident in Canada for a year if he/she "sojourns" (i.e. archaic word for stay temporarily or visit) in Canada for 183 days or more in that year.

[thehiker99]

Maths

In relation to keeping, or not keeping the "full time working overseas" option. I would have thought that that would be counterproductive, in terms of UK Plc.
I've always thought that was why there was a concession for people in "full time overseas employment".
(or have I got that wrong?)

A very large number of expats, (myself included), would simply up sticks and go and live "full time" somewhere else, if we are to be taxed, as if we were home, tucked up in bed with our wives, every night of the year.
As opposed to spending 6, 7 perhaps 8 months a year in remote desert, or offshore locations. (thinking here of the tens of thousands or so, expat oil and gas, and construction workers.)

This would mean, our not inconsiderable spending power, would be lost to the UK.

Either that or we'll just pack it in, come home, and go on the dole en masse!

No doubt HMRC will get it wrong again.

[etf]

I attended a talk a week or two ago and it was suggested that they might introduce a conclusive non-residence test (less than 10 days per annum for leavers and less than 45 days per annum for arrivers).

For those not meeting the conditions of the conclusive non-residence test, connecting factors such as a UK property, family, work and visits to the UK in preceding tax years etc will dictate how many days you can spend in the UK if you wish to achieve non-residence.

Just a punt at this stage, but something to kick around over a pint!

etf

http://theexpatriatetaxfactory.com