A statutory definition of tax residence
21 June 2011 in Individual, International HM Treasury has issued a consultation on the introduction of a statutory residence test for individuals. The condoc can be donloaded here. The deadline for responses is 9 September.
The motive behind the proposals is unobjectionable, although the detail, expertly summarised here, is likely to give rise to more than a few criticisms.
In particular, with a target date for effective enactment of 6 April 2012, one has to wonder why the UK has to have a statutory framework which bears little, to no, resemblance to any equivalent test already in use elsewhere. Pinching other countries' rules is hadly novel and piggy-backing on a tried and tested system would have given some degree of assurance that we were not heading towards another howling legislative balls-up of the kind so routinely favoured by the last government.
The next few months will tell but, as things stand, there's a lot of tidying-up that will be needed if the enactment of a sound definition is going to be achieved in a timeframe of not more than 9 months. Otherwise, one can already see the scope for a hasty succession of amending laws or for litigation.
Will acceessible accommodation [3.30] fall to be construed as meaning available accommodation and, if so, why not just say available accommodation ? The introduction of a common-law spousal test tucked within the family condition [3.30] is almost certainly lifted from the remittance basis rules in FA 2008, in which context the test has hardly aided the clarity and certainty that it now being sought in this latest definition. Similarly, is anyone going to be certain over what constitutes a home [3.20]. All we know is that a chair is not a house and a house is not a home, but that hardly helps much.
All being well, we will get to see draft legislation in the run up to Christmas. Hopefully, the draft legislation will reflect far more attention to detail than the condoc. If not, it is difficult to see how a test can sensibly be enacted for April 2012; in which case a delay until 2013 might not be a bad idea.