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Whether COVID-19 defensive measures will affect your UK tax residence status

Posted on 23 March 2020

Under normal circumstances, whether you are UK tax resident depends upon your ties to the UK and the number of days you spend in the UK in any one tax year (ending 5 April). However, if you are spending more time than expected in the UK due to "exceptional circumstances", certain days may be disregarded from your UK day count.

In light of the COVID-19 defensive measures currently in force globally, HMRC have published guidance confirming that days spent in the UK for the following reasons should be considered "exceptional circumstances" (and therefore potentially ignored):

  • You are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus.
  • The UK Government officially advise you not to travel from the UK as a result of the virus.
  • You cannot leave the UK as a result of the closure of international borders.
  • Your employer asks you to return to the UK temporarily as a result of the virus.

Currently, the maximum number of days spent in the UK in "exceptional circumstances" is 60 – but this limit too may be subject to change in light of the pandemic. The statutory residence test rules are complicated and days spent in the UK due to exceptional circumstances may not be disregarded in all situations. If an individual is tax resident in any one tax year, it will impact the number of days he or she can spend in the UK the following tax year as well as how soon he or she will become deemed domiciled for tax purposes. Full details of the new guidance published is available here.

20 March update: If you are non-UK domiciled and you think it is possible or likely that you may inadvertently become UK tax resident in the 2020/21 tax year that starts on 6 April, you should seek urgent advice now. That is because there are important planning steps you should take before the start of the tax year in which you become resident. Without planning for this possibility, the tax consequences could be very significant and you only have a few days to do so.

Practical guidance for COVID-19
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