Arising out of the UK Budget of 2011 and the uncertainty created by the high profile Gaines-Cooper case on residency, the UK Government has opened up a consultation forum on the reforms to the UK taxation of non-domiciled individuals and the statutory definition of tax residence and ordinary residence.
The proposed new statutory test, as well as being based on day counting, would take into account a number of 'connection' factors, namely family, accommodation, substantive work in the UK, UK presence in previous years and time spent in the UK compared with other countries. It will effectively be a case of running through a checklist. Whereas working out residence currently involves weighing up different factors, going forward it may be as simple as counting the number of days and relevant factors.
More revolutionary is the news that the Revenue is considering launching an interactive online tool to enable individuals to self-assess their residence status when the new statutory definition is introduced. A prototype of the tool is available online now and can be accessed by clicking here.
Consultations close 9 September 2011.
