Martin Rimmer at the Fry Group advises those having to make an emergency return to the UK
If you live in a country where political unrest is a consideration, it may be that you choose (or are forced) to return to the UK without a great deal of time to plan. It could also be that you need to spend a temporary period in the UK whilst the political situation in your overseas location has time to resolve and settle.
To follow is a short overview of the considerations which you may need to bear in mind, from a financial point of view, if you return to the UK in haste:
• If you have travelled to the UK out of concerns for your security, it may be possible to preserve your non-resident status by arguing that your time in the UK is as a result of "exceptional circumstances". This is more likely to be the case where evacuation has been recommended, but each case should be reviewed on its merits.
• If your presence in the UK is likely to be prolonged and you wish to try to remain non-resident, it might be advisable to spend some time outside of the UK (perhaps in another European country)
• If you spend 183 days in the UK in any UK tax year you become resident regardless of the reasons for your presence in the UK. This should be planned for carefully.
• If you do become resident, there are plenty of ways of reducing your exposure to tax through the use of pension planning and tax-efficient investment planning techniques.
Following is an update concerning the 'exceptional circumstances' for those of you based overseas.
In the last few days HM Revenue & Customs has confirmed that periods spent in the UK as a direct consequence of evacuations from Egypt, Libya and Tunisia due to the current political situation will be treated as 'exceptional circumstances'. Furthermore, this will remain the case for periods during which the Foreign & Commonwealth Office advice is to leave those countries, and for one week after the advisory has been lifted.
Do remember that where an individual is present in the UK for 183 days or more in a tax year, including any days spent here because of exceptional circumstances, then they will be resident in the UK for that year. HMRC has also reminded taxpayers that they will need to evidence that any days spent in the UK were a direct result of those ‘exceptional circumstances’.
The relevant periods and areas where an FCO advisory to leave has been, or is currently, in force are:
Egypt – For the period 29 January to 15 February 2011 those in Cairo, Alexandria and Suez were advised to leave.
Libya – Since 20 February 2011 the FCO has advised that those who can leave, should. This advisory remains in place at the time of writing.
Tunisia – For the period 15 January to 20 January 2011 the advisory was in place.
At the present time there are no restrictions on travel to Egypt or Tunisia.
Obviously your first concern will be the safety of you and your family, but when you do come to consider your financial position and are unsure about how you may be affected by this situation, please get in touch with the Fry Group for personal advice.
• We can help you consider how best to defer becoming resident and what steps can be taken before the end of the current tax year to reduce any exposure to UK tax.
• If you have any concern that you might trigger residence in the UK do contact us for advice immediately.
For more information please contact he author of this article, Martin Rimmer, on 01903 222230 or email martin.rimmer@thefrygroup.co.uk.
