Don’t fall into the UK residence trap
Reminder – Did you know that a short visit back to the UK can deem you to be UK tax resident?
You have left the UK and are enjoying life abroad. You may have some family or friends in the UK and are planning the odd visit back, or to return to the UK for a few months at some point in future.
If so, be careful that you fully understand how your residence may be affected so that you do not unwillingly become UK tax residence as a result.
From 6 April 2013, the UK changed its rules to clarify who is a UK tax resident. This was outlined through the introduction of the Statutory Residence Tests.
The implications of falling foul of these rules can be significant, especially where you may have set timeframes in place where the UK rules overlap with your country of residence abroad – a couple of examples being:
- UK Inheritance Tax planning and the concept of domicile (17 out of 20, or 15 out of 20 year deemed domicile rules);
- Pension transfers from a UK pension scheme to a recognised overseas pension scheme (ie to be out of the UK for at least 5 complete and successive UK tax years in order to not be as restricted by UK pension withdrawal rules).