If you are planning on moving to Portugal and you are leaving from the UK, then it is most sensible to ensure you leave the UK properly. This means you should take note of the Statutory Residence Test (SRT) rules.
On 19 March 2020, HMRC issued new guidance about how the SRT would operate as a result of the coronavirus (COVID-19) pandemic, which is likely to impact taxpayers' ability to move freely to and from the UK, and may require them to remain in the UK unexpectedly.
For the purposes of day counting for SRT:
HMRC considers that these circumstances are ‘exceptional’, and you can disregard up to 60 days spent in the UK as a result of these circumstances.
In August 2020, HMRC confirmed they will not extend the 60-day limit for exceptional circumstances, nor will they relax the significant break rule.
HMRC has also confirmed they will not tax the employment income of days worked in the UK due to coronavirus restrictions, provided:
In addition, the Finance Act 2020 has enacted changes to the day count for non-resident individuals in the UK between 1 March 2020 and 1 June 2020 working on COVID-19 related activities. These activities will not count towards the residence test.
The Statutory Residence Test applies from April 2013, introduced by the Finance Act 2013. It replaces the previous regime, so much of past case law on residence may now be safely ignored.
There are now three tests which determine whether an individual is to be treated as UK resident or non-resident in a tax year:
An individual may also become resident or non-resident mid-way through a tax year under split-year treatment, which applies when they come or go to work full-time (split-year treatment is covered separately).
There are also anti-avoidance rules that treat an individual as non-resident for a temporary purpose. These apply to the disposal of assets, income from close companies, and payments from offshore pension funds.
The SRT is not always conclusive in determining your residence for tax purposes.
Part 4 of the Statutory Residence Test (SRT) sets out anti-avoidance provisions, designed to ensure an individual cannot avoid UK income tax on income arising in the UK by going abroad and deferring receipt of income until non-resident. These rules apply from 6 April 2013.
Section 10A of the TCGA 1992 contains provisions for capital gains tax (CGT) purposes.
Where the anti-avoidance provisions apply, the individual may be treated as being only temporarily non-resident, and the effect is that income and gains assessed on a temporary non-UK resident are subject to UK taxes.
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