I always love a reference to the days of being able to catch episodes of Neighbours and Home and Away between classes at university, but unfortunately the closest I get to Home and Away these days is when it involves looking at the new statutory residence test about to be enacted in the UK.

From 6 April 2013 the rules that determine if someone is resident in the UK for tax purposes will change and will be based on the yet-to-be-enacted provisions included in the Finance Bill 2013. Once enacted the rules which determine an individual's tax residence will be put on a statutory basis known as the Statutory Residence Test (SRT).

Most taxpayers will not notice any change in their position and, for those individuals whose complex tax affairs have caused headaches for both themselves and HMRC, the new rules should provide more certainty about their residence status.

The broad outline of the test is not expected to vary dramatically from the current rules but does consist of:

  • automatic tests for non residence;
  • automatic tests for UK residence; and
  • sufficient ties tests for individuals who are not automatically considered non UK resident or UK resident.

Individuals who work or reside abroad but who retain assets in the UK or connections with the UK should carefully consider the revisions to the rules as they may impact on their residence status and the resultant tax liability.