HMRC published a revised version of its guidance on residence, domicile and the remittance basis (HMRC 6) on 27 October 2011 (please see the link in the ‘Resources’ section below).
HMRC describes the revisions as “clarifications” but it has re-worked two of the examples of how to calculate the annual average days in the UK for the purpose of the 91-day test that is used to determine UK residence.
Firstly, the new version states that individuals who go abroad to take up employment with a European Union institution will remain ordinarily resident in the UK for income tax purposes (though not for capital gains tax purposes) and will be resident here for any year that they visit the UK no matter how briefly.
Secondly, it also states that a non-EU national who is sent by a UK employer to work in another member state or any worker who is sent by a UK employer to work in Iceland, Norway, Liechtenstein or Switzerland will continue to be subject to UK National Insurance provided that the assignment is designed to last for no more than 12 months. This is in accordance with the provisions of the old EU agreement on social security rather than the agreement that came into force in May 2010. The explanation is that the countries mentioned above have not yet signed up to the new EU agreement on social security and the UK has chosen not to apply it to non-EU nationals.
HMRC: Residence, domicile and the remittance basis
For further information or to discuss the issues raised, please contact John Mooney or Bina Gayadien on +44 20 3051 5711.