Do you live in the UK? The answer to this question may seem obvious, but it may not be as clear cut as you think when it comes to questions of tax.
The trouble is that you do not have to be a jet setting celebrity to find that the rules become complicated for tax reasons.
Before this year, it used to be the case that as long as you stayed outside of the UK for at least three quarters of the year, you would definitely count as a non-resident. But now the days when the taxman was satisfied by a little look at your calendar are long gone.
The Gaines-Cooper case, where HMRC pursued a multi millionaire for years’ worth of back taxes, has set the new rules about non-residence. Or rather, confirmed that the 90 rule no longer applies without really setting in stone a new set of standards to apply.
Under the new “regime”, HMRC officials are entitled to look at your whole life to see where its “centre of gravity” is. This includes looking at not only how long you spend in the UK, but also where your children are educated, where your spouse lives, and what property you own there.
With Gaines-Cooper, who still had property in Britain and whose wife lived there, it may have been simple conclusion for them to draw. But for the average expat who may have kept the family home in the UK and may pop back from time to time, the lines may be rather more blurred.
So what can you do about it? Ignoring the issue is not an option. Even if the bills you are likely to face from HMRC are not likely to run to millions, no one wants a surprise letter from a creditor – especially not from a creditor like HMRC.
It seems that the only course of action is to check in from time to time with your financial adviser to get a quick assessment of whether you have been sucked back into UK residency for tax purposes.
