UK Tax Residence: How to correctly structure non-residence, partial working in the UK, secondments and exits from the UK

The widely reported decision of the UK Court of Appeal in Gaines-Cooper upheld HMRC’s approach to determining residence of individuals, HMRC having apparently moved away from their published guidance on this issue. HMRC’s more aggressive approach is evident in further judicial decisions over the last few months; only one of which was decided in favour of the taxpayer.

At the same time, the introduction of the 50% income tax rate has caused an increased interest in the structuring of UK/non-UK working arrangements, and in some cases, emigration from the UK. For non-UK-domiciled individuals, the change to the remittance basis of taxation, among other provisions, has made it critically important to determine exactly when individuals have become (or have ceased to be) resident or ordinarily resident in the UK.

Daniel Lewin (Tax Partner, Kaye Scholer LLP) and Marika Lemos (Barrister, Gray’s Inn Tax Chambers) discussed the impact of the judicial decisions on UK-resident taxpayers and non-UK residents working in the UK, and answered some of the questions that most commonly arise when structuring tax affairs.

In particular, the seminar addressed:

• Partial working in, and outside, the UK, including secondments between offices within and outside the UK.
• The 90-day rule and HMRC’s Statements of Practice generally.
• Ceasing UK residence?  Retention of UK property and continued family relations in the UK.
• Going non-UK-resident for a year (Hankinson).
• Dual-employment contracts: when they can still be used efficiently.