The government has postponed for a full year the introduction of a statutory residence test, despite a successful consultation over the summer which would have given individuals some much needed certainty about their status.
As revealed today, the surprising omission to the Finance Bill clauses relates to the test which most commentators had anticipated being announced today. The government announced in the Budget earlier this year its intention to introduce the test in the Finance Bill 2012.
David Gauke told TAXtv that the statutory residence test would be delayed for 12 months because there were “difficult issues to address” which, he was keen to point out, was “why the matter has not been dealt with before”. He said the government “remained committed to the statutory residence test” and that George Osborne would be giving details of the next step in the spring budget with draft legislation expected at this time next year and a new anticipated introduction from 6 April 2013.
[Update: the details were set out in ministerial statement today.]
In October Robert Gaines Cooper took a judicial review to the Supreme Court against the UK tax authorities, claiming (along with two others) that they had failed to stick to published guidance and had significantly changed their practice on tax residence.
The Supreme Court rejected the allegations, however, the law lords were critical of the guidance as “unclear” and “ambiguous”.