MIKE COADY

Growth Expert | Business Excellence | People Transformation
Mike Coady was appointed Chief Executive Officer of swissglobal in 2018, a position to which he brings a strong financial background and experience across a variety of roles. Mike is a skilled business strategy and growth leader, coach and motivator. He is a people’s person known for his ability to inspire teams towards excellence. He mentors his people and departments to transform their passion into outstanding results and long-lasting relationships with their clients.
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Explaining why expats need to be aware of SRT on Dukascopy TV

Mike CoadyExpat Advice Explaining why expats need to be aware of SRT on Dukascopy TV
Explaining why expats need to be aware of SRT on Dukascopy TV

Explaining why expats need to be aware of SRT on Dukascopy TV

During my recent visit to deVere Switzerland’s Geneva office, I was invited by Swiss financial television station, Dukascopy TV, to discuss on-air the changes to the way tax residency status is determined in the UK.

The interviewer, Doireanne McDermott, started by asking about when and why these modifications came about.

I responded that it was as early as 2011 and that after the consultation period drew to a close in February this year, the new-style Statutory Residence Test (SRT) came into effect in the Finance Bill of 2013, on 6th April.

I highlighted that the UK tax authority, HMRC, say that they’ve designed this SRT, with its new set of criteria, to make deciphering who is and who isn’t liable for UK taxes more efficient.

I noted: “First and foremost it will be British people who will be most affected.  Official figures estimate that there are four and a half million British expats around the world…but those figures are likely to be much higher…But it’s not just people living internationally, it’s also those who are moving back to the UK as they could be deemed ‘resident’ even if they are of a different nationality.”

The host was keen to track the changes between the old and the new systems.  The previous one, I suggested, had been in many ways simpler because it was known, under those rules, that if you spent more than 183 days in the UK in any one tax year you were “by automation a tax resident” of Britain, and the same applied if you spent on average more than 90 days in the UK over a consecutive four year period.

The new SRT

The new regulations, I explained, not only take into account the amount of days you spend in the UK, but also analyse your “centre of influence.”

I said: “So, someone may be living overseas and obeying the 90 day tax rule, but [they could] have ‘too much of their lifestyle’ within the UK – whether that be their family, their home, their golf club membership, their bank accounts…their sphere of influence.”

The interview moved towards the practical considerations that people who might be affected by the changes should look at.

“The new scheme is more difficult as it requires a greater degree of planning,” I said.  And the challenging part is the connection or ties that could classify someone as a UK tax resident or not.

“Most people [who live overseas] when they see ‘accommodation’ on the SRT would think ‘I don’t own a house, so I’m OK with that one’.  But the rules suggest that if you have access to a property [through a family member, for example] for a period of time, it could be argued that you do in fact have your own home.”

These added features of the new SRT, I went on to say, make sitting down with a financial planner even more crucial in order to gauge what does and doesn’t classify someone as a UK tax resident.

The interview can be seen in full below:

http://www.youtube.com/watch?v=bO_LBE8IKsg

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