The legislation in the statutory residence test allows for some days to be ignored in applying certain of the statutory residence tests where the “exceptional circumstances” condition is met.
We approached HMRC as we had a client who did not expect to be UK resident for 2019/20, as he expected to be here for less than 90 days, but who is now unable to leave and will therefore go over the 90 day limit.
They’ve pointed us to their updated advice, (updated 17th March), unfortunately it has not been well-publicised, hence this article.
“Whether days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each individual case.
However, if you:
• are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus
• find yourself advised by official Government advice not to travel from the UK as a result of the virus
• are unable to leave the UK as a result of the closure of international borders, or
• are asked by your employer to return to the UK temporarily as a result of the virus
the circumstances are considered as exceptional.”
This applies for some of the day counting tests but not all, see RDRM 13230
If an individual spends 90 days or more in the UK in 2019/20 (for example as a consequence of COVID-19), then this may not in itself make them UK tax resident for 2019/20 (their ties may allow them to stay here for 120 days) but it does mean that they will then have the “90 day tie” for 2020/21 and 2021/22. Therefore, this guidance may also be relevant for individuals who are not UK tax resident for 2019/20, but want to know what the impact of extra days spent in the UK will be on their tax residence status for 2020/21 and 2021/22.
It is worth noting that the number of days in a tax year which can be disregarded is always limited to 60. This would take us to 5th June 2020; after that, a day spent in the UK as a consequence of the virus would count for all the statutory residence tests as things stand. However, if travel bans continue that prevent individuals leaving the UK we would hope that the government amend the 60 day limit in the interests of fairness.
For individuals who are not UK domiciled, they may wish to claim the remittance basis for 2020/21 if they do become UK tax resident. We would be happy to advise on planning to be undertaken before 5th April for individuals to establish appropriate clean capital arrangements and manage remittances.
The statutory residence tests are complex and we can advise on individual circumstances.