In its latest Revenue & Customs Brief on Residency, Domicile and the Remittance Basis, HMRC have announced a number of operational changes to its information and guidance on this topic and how it will deal with taxpayers affected by Residence and Remittance compliance requirements. The operational changes incorporate the significant amendments to the residency and remittance rules introduced by Finance Act 2008.
The main HMRC guidance for residence, domicile and remittance basis issues has for many years been the IR20. This was updated last year to incorporate some changes introduced by Finance Act 2008. However, Guidance to replace the IR20 will be published soon and at the same time the IR20 will be withdrawn. HMRC will also be withdrawing any other guidance on residence and ordinary residence contained in other manuals, Statements of Practice and publications (for example R&CB 01/07, TB52, SP/A10, SP3/81, SP2/91, SP17/91). In the light of this any practices associated with the old guidance, whether in IR20 or elsewhere, will not apply from 6 April 2009, unless provided for in the new guidance.
The remaining guidance will be published shortly and will include:
- A simple guide to residence, ordinary residence and domicile.
- The 'Residence, Domicile & the Remittance Basis' guidance (HMRC6). This replaces the old IR20.
- New guidance on the remittance basis rules. (This will form part of the new 'Residence, Domicile and Remittances' manual for HMRC staff.)
- Some new guidance on domicile. (This will move to the Residence, Domicile and Remittances manual in due course.)
- Some new guidance on non-resident trusts.
- Some guidance on the application of the remittance basis to the Transfer of Assets legislation. (This will form part of the new 'Transfer of Assets' manual for HMRC staff.)
- Updates to the Capital Gains Tax manual to reflect the changes to the remittance basis.
- A new short guide for international students.
- Revised guidance on letting property abroad.
Initial non-domicile claims - Form DOM 1
Initial non-domicile claims - Form DOM 1 are also to be discontinued in light of the publication of new guidance on domicile. Any DOM 1 forms received by HMRC by close of business 25 March 2009 will still be processed but any received after that date will be returned unexamined.
Individuals paying the £30,000 Remittance Basis Charge
In response to the fact that the rules for nominating income and gains upon which the £30,000 is paid, and for identifying what is taxed if those nominated income or gains are later remitted to the UK, can be complex HMRC has decided to centralise such tax payers' tax affairs in one HMRC office from 2009-10. This will be the CAR Residency office in Castle Meadow, Nottingham.
For full details on all the operational changes please review the Briefing here