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Following the well documented case of Robert Gaines-Cooper being declared a UK resident by High Court and Appeal Court judges, HM Revenue & Customs have released a consultation document, which will come into force in April 2012. Tax experts are advised to plan ahead to avoid huge, unexpected tax bills.

Robert Gaines-Cooper believed that as he had carefully recorded the number of days spent in the UK, staying below the 90 day rule, he would be classed as non-resident. However, as he has a family home in Henley-on-Thames and Rolls-Royce cars kept in the UK, the judges ruled that he had not made a “clean break”. The judges also stated that HMRC needed to provide clarity for individuals, and not judge each case separately.

The consultation paper will give clear criteria so individuals can determine whether they are resident or non-resident. Rather than being based solely on the number of days spent in the UK, the new guidelines will look at UK connections, which includes a family home or available accommodation in the UK. If a person has a family history in the UK or family in the UK, residency will have to be considered closely.

According to the new rules, it won’t be as simple to tick the boxes and be classed as non-resident. Some individuals may only be able to spend as little as 10 days in the UK, before being deemed resident. To avoid receiving an unexpected tax bill, individuals are advised to consult an expert who can review the situation before April 2012.

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