Whitley Stimpson warns people claiming non-resident status of HMRC ties tests

May 8, 2013

Following the introduction of new statutory residence tests which came into effect form 6 April 2013, leading Banbury accountancy firm, Whitley Stimpson, sends a warning to UK domiciled individuals claiming non-resident status for UK tax purposes to get up-to-speed with new HMRC ties tests.

People that work and essentially live overseas but return back to the UK to visit a partner or spouse for weekends may find it harder to retain their non-resident status under the new requirements set-out by HMRC.

“Individuals will have an increased requirement to keep detailed records,” explains Val Buzzard, Partner and International specialist at Whitley Stimpson.  “Those claiming non-resident status will need to track dates of arrival and departure and may also have to provide evidence of where they have stayed to ensure they do not get caught-out by HMRC’s accommodation tie.”

The new statutory residence test is in three parts: the automatic overseas test, the automatic residence test and the sufficient ties test, the latter of which contains rules to be considered by an individual whose residence status is not confirmed by the other two parts.  This includes tests relating to family, accommodation, work and the 90-day tie.

According to HMRC, its new rules will make it easier to determine an individual’s residency status, although there will still be cases that are not black and white.

“We recommend that individuals start reviewing their pattern of visiting the UK now to ensure that their residence status does not change under the new tests,” continues Buzzard.  “Once treated as a UK resident, a person is subject to income and capital gains tax and may also have to pay tax on money invested in the UK or to cover living expenses.”

The number of days spent in the UK during the last and current tax years will also be relevant when working out whether you were resident in the UK for any of the previous three tax years which is an element of the “automatic overseas test” and the “sufficient ties’ test.

If you are unsure on how the new rules might affect your residency status contact Whitley Stimpson Partner, Val Buzzard, for a FREE consultation on T: 01295 270200; E:ValB@whitleystimpson.co.uk