Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Statutory residence test to be unveiled

13 June 2011
Issue: 4308 / Categories: News , Gaines-Cooper , residence test , Residence & domicile
Residence and domicile proposals are expected to be specific

The much-anticipated consultation on residence and domicile is due to be published this week.

As well as including details of the proposal to remove the tax charge on foreign income remitted to the UK by non-domiciles for commercial investment in UK businesses, it will contain information on a new statutory residence test.

Although this will be the culmination of discussions that have taken place on the subject over some years, if the document followed the new policy for making tax legislation, it would be concerned with principles rather than specific proposals.

However, Taxation understands the proposals will be specific, although a range of options may be given.

Individuals want ‘certainty and clarity’ in this area, said As Grant Thornton’s Francesca Lagerberg, who suggested that the test will ‘try to marry objectivity and subjectivity’. It could look quite complicated on first glance, but the hope is that, for the vast majority of people, it will result in a relatively quick answer.

It is expected to retain the days in the UK count and the midnight test while providing guidance on the implications of such difficult matters as the location of the individual’s family and any UK property.

Ms Lagerberg said it will probably not be possible for the test to be ‘purely objective’ but, following consultation, the intention is for the UK to have a test that enables taxpayers to know exactly what their UK tax position is: something that has been thrown into some confusion following such cases as Gaines-Cooper.

back to top icon