New version of HMRC 6: Guidance on residence, domicile and the remittance basis

HMRC has published a new version of its guidance booklet HMRC 6 Residence, Domicile and the Remittance Basis. This is the second revision of HMRC 6 and was published on the HMRC website on 29 December 2010.

The front of the latest HMRC6 has the statement: “HM Revenue & Customs does not consider that the latest revisions have altered the current position in most cases. However you can continue to use the wording in the previous version of HMRC6 for any tax liability that arises before 5 April 2011.

The 91-day test is covered in detail. HMRC’s view is that this test is one which can bring individuals within the UK tax net rather than proving that an individual has lost his residence status.

The only section which gives any hard and fast rules are the revamped full-time working abroad guidelines.

The Ordinary Residence rules have been updated following the case of Dr Tuczka,  i.e.an individual could be UK-resident at a time even when he has not been in the UK for three years and originally had no intention of staying in the UK in excess of three years. HMRC say that such an individual will become Ordinarily Resident from the start of the tax year during which he first had a settled purpose of staying in the UK.  Another key change is that the taxman now states that where the individual does not know how long his visits to the UK will last, he will become Ordinarily Resident from the start of the fourth tax year where average visits in the three prior years total more than 91 days. In the previous version of HMRC 6 the average was over four years with Ordinarily Residence starting in the fifth year.

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