CIOT Comments On Lib Dem Tax Residence Amendment

by Jason Gorringe, Tax-News.com, London

27 May 2008

The UK's Chartered Institute of Taxation (CIOT) on Tuesday noted that the Liberal Democrats have tabled an amendment to the Finance Bill proposing a comprehensive statutory tax residence test.

The CIOT has been calling for a comprehensive statutory residence test for some time as a way of bringing certainty into the current residence situation, particularly in the light of recent cases.

It stated that: "The CIOT intends to discuss this issue with other relevant professional bodies in order to develop a consensual view on the appropriate test to adopt which does not adversely affect yield."

And continued: "It is likely that any sensible comprehensive test will take some time to devise but the CIOT believes that it would be possible to achieve a statutory residence test in next year's Finance Bill."

John Barnett, Chairman of the CIOT's Capital Gains Tax & Investment Income Sub-Committee, commented:

“We welcome the Liberal Democrats’ contribution to this debate as it is a very important issue that needs to be discussed. While the Government has stated that it does not wish to make any more changes to the non-domicile rules, the CIOT feels that a statutory residence test would bring certainty to this complex area."

"If done with sufficient consultation it need not result in unexpected or adverse consequences. And it will be popular with the business community because it will avoid the current ambiguities that are not helpful either to HM Revenue & Customs or to taxpayers,” he concluded.

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