Changes To UK Residency Rules Under Discussion

The March UK budget outlined several potential changes residency rules, which will now undergo a 12 week consultation period.

London, UK (Pryce Warner International) June 27th, 2011 – The changes initially proposed under the budget outlined plans to limit the amount of time Expats could work in the UK to potentially only ten days.

However this and several other rules are now up for debate and will undergo a 12 week consultation period to determine a new framework which will more easily be able to determine the residency of UK citizens.

The new proposals outline the following suggestions. That residency should be determined on a yearly basis, that it will be more difficult to become resident overseas but easier to become resident in the UK, to scrap the proposed 91 day average test and utilise three separate residency tests to determine the status of each indivudual.

This should come as a relief to many Expats, many of whom claimed that the ninety day average test would effectively mean that anyone who attended several business trips to the UK would be required to pay UK income tax, despite them being resident overseas for the rest of the year.

In some instances the previously proposed ten day rule will remain in place. This would apply to anyone that is leaving the UK for anything less than full-time employment.

Any retired Expats or those with significant ties to the UK will need to pay close attention to the new regulations. People visiting the UK with a certain frequency may have their residency status checked every year and therefore will need to carefully plan trips so as to retain their overseas residency status.

After the 12 week consultation period the new regulations will come into force from the 6th of April 2012.

David Harra, a Senior Market & Investment Analyst with Pryce Warner International, a Financial Services Company for Expats commented: “These new proposals under discussion should help to resolve some of the worrying questions that the budget proposals created. It is encouraging to see that the UK government is no longer hoping to use the 91 day average test as this would potentially have unnecessarily limited the amount of business visits Expats could make. Though the exact specifications of the new rules have yet to be announced, judging from the proposals under review, they should end up being much fairer on the majority of British citizens living and working overseas than those announced in March.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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