Resident or Non Resident? That is the Question

Most people are under the impression that if they spend less than 183 days in the UK then they can be classified as non resident for tax purposes. This view is totally incorrect and there has been quite a few important cases heard in court recently that outline the real facts.

The main aspect the Revenue focus on (as well as the 183 day rule) is the concept of a 'distinct break'. In order to be classified as non resident you must cut all ties with the UK to include, a property in the UK available for private use and even all social clubs.

The most recent case is Mr Grace vs HMRC. Mr Grace left the UK to go to South Africa. He lived an active social life in Australia with a permanent property as his main residence and only visited the UK on a small number of trips. However as he had a connection with a company in the UK and still retained UK accommodation the Revenue argued successfully he is still resident and would now have dual residency in the UK and Australia.

To me this is crazy when you think about it but what this case illustrates is just how difficult it can be for a UK resident to become non resident.

I would seriously advise to contact your professional tax advisor if you are thinking about leaving the UK even temporarily through work.

Please feel free to contact me mitch@ljd.uk.com