Earlier this year HMRC introduced a new statutory residence test, which has been designed to provide greater certainty as to whether or not individuals are UK resident for tax purposes.

This is a complex area and the unsuspecting can often be lured by lucrative “tax free” benefits of overseas contracts.   But contrary to popular belief non residence has never been simply based on the number of days outside the UK and anyone considering such contracts should get proper tax advice first, otherwise they might find themselves with a substantial tax bill on their return to the UK!

In addition to 2 fairly clear tests which establish residence or not, there is a much more detailed review of the grey area in between – this is called the sufficient ties test and this is where the fun really starts. This test considers the days in the UK and number of ties to the UK on a sliding scale.  These include family ties (spouse/children remain back in the UK) and accommodation ties (a place to stay while back in the UK) which can often catch situations where one family member moves abroad to work leaving the family behind in the UK.

If you are considering an overseas work contract, it is imperative that you seek tax advice first as this is a very complex area of tax.  I would be delighted to explore your specific situation and explain your position in plain English so you know exactly where you stand.