United Kingdom is likely to introduce the statutory definition of tax residence in the Finance Bill 2013. Draft legislation which includes a statutory definition of tax residence will provide clear rules for taxpayers; the same has been published after considering public views.

1. Change in Rules that Determine Tax Residence for Taxpayers in UK
The United Kingdom is likely to introduce the statutory definition of tax residence in the Finance Bill 2013. Draft
legislation which includes a statutory definition of tax residence will provide clear rules for taxpayers; the same has
been published after considering public views. The British Government also intends to bring in reforms to the
concept of ordinary residence.
Statutory Definition of Tax residence: Background
As the current rules that determine tax residence for taxpayers are very ambiguous, the UK Government
announced to introduce a statutory definition of tax residence providing clear rules to taxpayers in the 2011
budget.
Statutory Definition of Tax residence: Consultation
The consultation proposed new rules and sought views on its design and implementation from individuals,
advisors, businesses and representative bodies who would be affected or from those who were interested to share
their views. The consultation was concerned with issues of tax residence in the UK for individuals. Also, the HM
Revenue and Customs (HMRC) has proposed to provide an online tool enabling individuals to self assess their
residence status.
Statutory Definition of Tax residence: Consultation Responses
The UK Government received views from individuals and organizations and after considering the views expressed,
the British Government published an abstract of responses to the Statutory Definition of Tax Residence
consultation in conjunction with the draft legislation in 2012. The UK Government’s latest document includes:
Government’s proposal to end ordinary residence,
retention of overseas workday relief, and
the draft legislation.
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