Restrictions on international travel could mean that people inadvertently fall foul of residency rules for tax and find themselves in the UK tax net.

An individual’s UK tax residency status is determined using the Statutory Residence Test (SRT). Under the SRT, the number of days an individual spends in the UK. during the tax year is taken into account amongst a number of the detailed rules that apply to determine their UK residency position.

In certain (but not all) cases, a day spent in the UK can be considered ‘exceptional’, and can therefore be disregarded, when counting the number of days an individual has spent in the UK for the purposes of the SRT. As it stands, the maximum number of days spent in the UK in any tax year that may be ignored due to exceptional circumstances is 60. This is a limit, not an allowance or entitlement so it applies whether there is one or several events in the same tax year. Days spent in the UK over the 60-day limit count as a day of presence for the purposes of the SRT.

HMRC has published guidance on when an individual’s presence in the UK due to the COVID-19 outbreak will be considered to be the result of ‘exceptional circumstances’.

If the individual:

• Is quarantined or advised to self-isolate in the UK as a result of the virus
• Finds themselves advised by official government advice not to travel from the UK as a result of the virus
• Is unable to leave the UK as a result of the closure of international borders
• Is asked by their employer to return to the UK temporarily as a result of the virus.

There are some questions which remain unanswered such as what if you cannot, or do not want to return to your usual residence because of the extent of the COVID outbreak there. Trustees should also be particularly vigilant if they have beneficiaries who are usually resident overseas but are now spending time in the UK. If those beneficiaries have become UK tax resident and then receive distributions, they could receive unexpected tax demands.

Emily Hillier, Personal Tax Consultant for Shaw Gibbs comments

“HMRC has already indicated that it will look sympathetically on relevant claims and we also expect that the 60 day limit for exceptional circumstances to be relaxed. However, we recommend that those affected keep records including travel and hotel tickets, doctor prescriptions/appointment details and a diary of their movements”