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Tax Residency in the United Kingdom

September 12, 2013

HMRC have recently revised the rules and their interpretations of them with regard to residency in the UK for the purposes on income tax and capital gain tax. The rules previously depended on physical presence in the United Kingdom. The new rules are similarly based on physical presence, but have been expanded to also include “Centre of Social Influence Rules”.

Under these rules, a person previously subject to British income tax now working outside of Britain may remain subject to British income and capital gains tax, if their families remain in Britain. The previous rules could be summarised in to 2 paragraphs: – despite HMRC claims that they have “clarified” these rules, the new rules take four pages of explanation! A summary of the rules can be found at on the HMRC website, but their interpretation might need some help!

For those already in Britain intending to live or work abroad, for those already abroad, and for those intending to relocate to the UK there should be significant advantage in getting professional advice to help understand the rules and to plan to work within them to reduce UK tax exposures to the minimum.

We will be pleased to assist on request.