Proposals for a legal definition of UK tax
residence
The introduction of a statutory residence test aims to provide
greater clarity and objectivity in tax legislation.
A cause of great uncertainty for some taxpayers should finally
be cleared up with the Government's proposals to introduce a
legal definition of tax residence. The move, which should come into
effect from 6 April, 2013, should provide simple, transparent and
objective legislation. At the same time, the concept of ordinary
residence will be abolished.
The proposed residency tests
There will be a three-stage test to determine residency.
1. Automatic overseas test – if any of the following
conditions are met, non-resident status is guaranteed: the
individual goes abroad to work full-time, or is in the UK less than
46 days in the tax year having been not resident in any of the
previous three years, or is in the UK less than 16 days if resident
in any of the previous three years.
