Reform of the Taxation of Non-Domiciled Individuals – Statutory Residence Test

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In the 2011 Budget, the Government announced that it would introduce a statutory definition of tax residence, which led to a consultation.  We were expecting the introduction of a Statutory Residency Test from April 2012 to be included in The Finance Bill 2012.  However, a Ministerial Statement issued 06 December 2011 advised that a number of ‘detailed issues’ were raised in the Consultation, therefore, this Test will be delayed until Finance Bill 2013, to be effective April 2013.  At this time, any reforms to ‘ordinary residence’ will also be made.

Comment

The recent Supreme Court ruling in the case of Robert Gaines Cooper v HMRC led us to hope that we were going to be provided with some clarity on tax residency in the UK.  However, it still has no definition in law.

It is disappointing that uncertainty will still exist for, presumably, at least one more tax year – assuming that an introduction date is now 2013 rather than 2012.

Further Information

• HM Treasury - Written Ministerial Statement – Non-Domicile Taxation and Statutory Residence Test
• Payroll-Help 06 November 2011 - Robert Gaines Cooper v HMRC

Tags: finance bill 2013, statutory residence test, tax residence

This entry was posted on Monday, December 12th, 2011 at 08:32 and is filed under residence. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.