Questions on new statutory residence test - USERNAME:LANG1
Tax Question:
I have been studying the draft Statutory Residence Test, published on Friday, which I like the look of.
I would of course be a leaver, under Part C.
As regards the five "connection factors" it would appear that I would be treated as -
NO - UK resident spouse/partner or family (I do have the family but would not spend >=60 days with them worldwide per annum so this factor would not apply)
NO - UK employment as I'd not be working >=40 days in the UK
NO - accessible accommodation in the UK, as I do not own a residence and would only rent accommodation in the UK on a weekly basis.
NO - spending more days in UK than any other single country (can spend up to 182 days in US, would spend <=119 in UK). Better to spend <=122 in the US so as to avoid filing an IRS 8840 return.
YES - spent >=90 days in UK in previous tax year.
Thus it looks to me that only one factor applies to me and I am OK for <=119 days in the UK. Moreover, were I to visit for <90 days for two consecutive years, I would then have none of the 5 factors and could visit <=182 days the next year.
I have two questions -
1. Does the above interpret the proposed SRT correctly?
2. You advised me earlier against becoming a fiscal nomad,
Property overseas is certainly one of the key issues, but needs to be supported by everything else to ensure that your home is genuinely now overseas. If you're looking at substantial UK visits then being a fiscal nomad may not be advisable. Ideally you should look to fix your residence status in a particular country.
Am I correct in thinking that the new clearcut SRT test makes this advice obsolete?
Answer:
1. Does the above interpret the proposed SRT correctly?
Yes, this looks like a correct interpretation. You won't be caught by A or B and therefore you'd need to consider the various connection factors to determine your residence position. Your analysis of these looks correct and therefore you could spend up to 119 days in the UK whilst retaining your non resident status.
2. You advised me earlier against becoming a fiscal nomad,
Property overseas is certainly one of the key issues, but needs to be supported by everything else to ensure that your home is genuinely now overseas. If you're looking at substantial UK visits then being a fiscal nomad may not be advisable. Ideally you should look to fix your residence status in a particular country.
Am I correct in thinking that the new clearcut SRT test makes this advice obsolete?
Yes, the SRT (in its current form) makes the position much clearer. Providing you meet the requirements in terms of establishing non UK residence under the SRT, the fact you avoid establishing residence overseas should not impact on this.