Consultations & legislation
Statutory definition of tax residence
Issued: 17 June 2011
Open date: 17 June 2011
Close date: 09 September 2011
Update and announcement
December 2011: Due to the detailed issues raised in responses to the consultation, the Government has announced that it will legislate the statutory residence test in Finance Bill 2013 to take effect from April 2013, rather than April 2012. It will introduce any reforms to ordinary residence at the same time. This will give time to consult thoroughly on the detail of these changes well in advance of implementation and ensure they achieve the objective of providing certainty.A further announcement will be made around Budget 2012 when the Government will publish its response to the 2011 consultation together with a further consultation on policy detail and draft legislation.
Background
The current rules that determine tax residence for individuals are complicated and unclear. At Budget 2011 the Government announced that it would introduce a statutory definition of tax residence. Its aim is to create clear rules that provide greater certainty for taxpayers and are simple to use.Consultation
This consultation proposes new statutory rules to define tax residence and seeks views on their design and implementation. The tax residence of the vast majority of individuals will not be affected by the introduction of the new statutory definition. As part of this consultation, the Government is also seeking views on options to reform the concept of ordinary residence, which currently lacks a statutory definition.
This consultation will only cover the issue of tax residence in the UK for individuals and will not cover the residence of companies.
HM Revenue & Customs is considering the possibility of providing an interactive online tool to enable individuals to self assess their residence status when the new statutory definition is introduced. A prototype of this tool is available below and interested parties are invited to make use of this to assess how a statutory test could operate in practice.
The Government would welcome views from individuals, advisors, businesses and representative groups who are affected by, or have an interest in, the rules on tax residence.
Consultation documents
- Statutory definition of tax residence: a consultation (PDF 378KB)
- Interactive online tool (Excel 322KB)
- Press release: Government consults on reforms to the taxation of non-domiciled individuals and a statutory definition of tax residence
The consultation document is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website.
For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
Contact details
Post
Statutory residence test consultation
Personal Tax Team
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