Expats: Keep a daily record of your movements

Expats are advised to keep a daily record of their visits to and from the UK after the HMRC introduced a Statutory Residence Test to target non-residency tax claims.

It’s no secret that the HMRC changed the rules surrounding tax residence eight months ago.  It was in April 2013 that they introduced the Statutory Residence Test – a test that determines whether an individual is resident in the UK for tax purposes. More specifically, the test is designed to assess whether you’re liable for UK income, Capital Gains Tax CGT and Inheritance Tax (IHT). People most affected will be individuals who frequently fly to and from the UK.

UK tax rules surrounding residence always provoke heated debate, often offshore as well as in the UK. It’s our experience that these new rules, while providing greater clarity, are nonetheless still complex. Interpreting them isn’t easy.

According to Scott Brown, Head of Accounting at 1st Contact, “Anyone who chooses to be classed as a non-UK resident for tax purposes, but happens to be nearing the maximum time frame that they’re allowed to spend in the UK, should keep a detailed record of their movements. This record should include specific details that cover their daily movements to a T – even the exact times you arrived in, or departed, the UK. And remember, even if you stay in the UK after midnight, that’s still considered a day in this sense.”

If you don’t have this info, he advised, there’s always the possibility that you will be liable for extra tax to pay.

For more information on the Statutory Residence Test, contact 1st Contact Accounting. They’ll be able to sort out the stress of tax returns, tax planning, and property tax.