It feels like we have been discussing the introduction of HMRC’s new initiative – the Statutory Residency Test – for quite some time now but next month, finally, it will come into force.

Article written by The Overseas Guides Company

As of April 6, those Britons who spend large amounts of time overseas, either for work purposes or in a property that they enjoy for a few months a year, will have to take a test to determine once and for all where they are considered resident for tax purposes. It’s a tricky business so if you aren’t sure where your loyalties lie, be sure to contact a tax specialist for advice in order to avoid an unwelcome knock on the door from the tax man a few months down the line.

So who should be spurred into action by the test’s introduction? It is those who are not currently classed as a tax resident in the UK but who do still spend a portion of the year in the UK and who hold investments in their native country who should act now.

The test will assess individuals on two levels with two different tests: the automatic residency test and the sufficient ties test. These methods will be used by HMRC to determine whether an individual is classed as a resident or not in the UK for the purposes of income tax, inheritance tax and capital gains tax.

The aim of the new test is to clear up existing confusion created by the current rules which have proven rather confusing to many expats who move from country to country throughout the year.

With all eyes on the new test and its successful implementation, those who have been operating a little close to the line tax-wise would be wise to seek some advice from the experts to avoid that inevitable brown envelope landing on your doorstep with a hefty fine enclosed.

The Overseas Guides Company works with a financial advisory firm to assist British expats or people moving abroad to protect their assets and the right decisions regarding their tax status. For more information, email OGC@overseasguidescompany.com.

One way to save money when buying overseas property or moving abroad is to use a currency exchange specialist when transferring your pounds into a foreign currency account. For more information on this, visit the Currency Zone or contact Smart Currency Exchange.

For more information about emigrating abroad, download The Overseas Guides Company’s free Emigration Guide.