Global Executive Mobility: employment and tax law e-bulletin
UK Alert: Statutory residence test - draft legislation and update
28 June 2012
by Jonathan Exten-Wright, Lynda Finan
The government has now published draft legislation for the new statutory residence test (SRT) which will apply for income tax, capital gains tax and inheritance tax purposes from 6 April 2013. The draft legislation also includes provision to codify overseas workday relief.
The overall framework of the SRT will remain broadly the same as proposed in the original consultation document published in June 2011, although there are some amendments to the detail which are generally welcome.
It is important for employers to ascertain the residency status of their internationally mobile employees to determine which earnings are liable to tax in the UK and, therefore, when PAYE withholding obligations apply. With careful attention to the rules, accidental UK residence, and therefore tax liability, can be avoided.
In this alert, we summarise the key concepts of the SRT and its impact for employers in relation to internationally mobile employees.
This information is intended as a general overview and discussion of the subjects dealt with. The information provided here was accurate as of the day it was posted; however, the law may have changed since that date. This information is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper is not responsible for any actions taken or not taken on the basis of this information. Please refer to the full terms and conditions on our website.
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