New Property And Tax Woes For British Expatriates
British expatriates with property in the UK, have been given a stern reminder by advisors from Blevins Franks. Who have made it clear that if expats want to avoid the possibility of being liable to tax in the UK, then they will need to make sure they establish residency in their new country. This is if they have kept a property in the United Kingdom, and if they are frequent visitors to the British Isles.
Trying to establish residency in another country is far from an easy process, and it can be particularly complex for Brits. But this doesn’t mean its a process which is impossible to overcome. After all, where there is a will there is a way.
Up until April of last year, the United Kingdom did not possess a statutory residence test. One was forced through a number of landmark cases, taking many years to form and finally become a permanent feature in the UK. However, the old rules will live alongside the new rules for a short while. Which still leaves the small problem of the unfortunate grey areas for British expatriates, who are trying to become residents in their new country.
Statutory residence test could help establish residency abroad
One of the main hurdles has been the fact that all countries have their own processes. And residence determines whether a country will be taxing its residents on their incomes from other countries, and whether income and any gains are taxable.
Many countries have a simple system, and as long as six months have been spent in the country during a tax year it will be sufficient to become a resident of the country. But then there are those countries who use a system which can only be described as complex. These are known to include day counting spanning over several years, considering where your primary home is located and even the application of several tests.
Prior to 2013, the test required that there be a clean break with the United Kingdom. After which, the individual could not spend more than 91 days on average in the UK. But in practice this was much more complicated. However, while the new statutory residence test is still complex, it does provide a greater amount of certainty in regards to an individual’s tax position. For British expatriates looking to establish residency in another country or even clear up their tax position, this change will serve for the most to part make the process a little easier.