Keeping UK property when you move abroad and its impact on establishing non residence

Following a tax question from one of our members we've looked at how having UK available accommodation will impact on UK residence in 2010. It's difficult for anyone to provide detailed guidance on just the accommodation aspect as it's closely tied up with other overall UK ties. Up until 1993 one of the key issues was whether there was a 'permanent or settled abode'. The cases applied this so that if you were non resident and occupied a UK property you were UK resident for tax purposes. It didn't matter that the UK property was one of a number of international homes or even if you only spent one or two months in the UK property. The cases stated that if it was available to the expat then it would be counted. Crucially the expat didn't even need to own it (just have it made available to him). Therefore an expat could be UK resident if accommodation was made available to him by a UK company that he controlled. After 1993 legislation removed the available accommodation rule. But only in so far as it was taken into account in assessing whether an individuals presence in the UK was for a temporary purposes. As such even after 1993 available accommodation could still be taken into account in relation to anyone who visits the UK as part of the regular order of their life. It was therefore always advised that UK property should be sold or let if possible. Gaines Cooper & Grace The Gaines Cooper and Grace decisions have raised this issue again. In Gaines Cooper it was specifically stated that: '…The availability of living accommodation in the UK is a factor to be borne in mind in deciding if a person is resident here…' They confirmed that the you're resident if you have a settled abode here as under the old definition: '…My Lords, the word "reside" is a familiar English word and is defined in the Oxford English Dictionary as meaning "to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place". … In most cases there is no difficulty in determining where a man has his settled or usual abode, and if that is ascertained he is not the less resident there because from time to time he leaves it for the purpose of business or pleasure. … But a man may reside in more than one place. Just as a man may have two homes -- one in London and the other in the country -- so he may have a home abroad and a home in the United Kingdom, and in that case he is held to reside in both places and to be chargeable to tax in this country…' Therefore having a UK property available for your use is very closely tied up with having the UK as your settled abode. If there are few other UK ties you could have UK available accommodation and not be classed as UK resident. If however you have UK available accommodation and visit the UK as part of the regular order of your life (or as the judges put it in once case having a 'substantial ongoing UK connection') you would be classed as UK resident. It's worth noting that in the Gaines Cooper case the taxpayer spent more time in the UK than anywhere else, had his family here and made regular and frequent visits to the UK. The fact he had UK available accommodation was an ancillary nail in his coffin. The commissioners found that England remained the "centre of gravity" of his life and interests, his chief residence was in the UK, he had a "settled abode" in Henley-on-Thames and he spent more time in the UK than the Seychelles or anywhere else. So in short you can remain non resident and have UK accommodation, although clearly you should preferably be looking to sell or let the UK property. If you do retain UK property: