Book Review: ‘The New Statutory Residence Test for Individuals: A Practical Guide’
‘The New Statutory Residence Test for Individuals: A Practical Guide’ by Malcolm Finney (2013) Sweet & Maxwell ISBN : 978-0-41403-095-4. Available to purchase from Amazon.
This book aims to provide practical guidance to tax practitioners of all levels on the new Statutory Residence Test (SRT) as it appears in ss. 218 & 219 and Schedules 45 and 46 Finance Act 2013 together with HMRC’s Guidance notes which first appeared in December 2012 and were then updated in May 2013.
Tax law and HMRC guidance change quickly and unfortunately HMRC issued updated Guidance in RD3 in August 2013 http://www.hmrc.gov.uk/international/rdr3.pdf It is likely that this book, in an effort to be published quickly to help practitioners, does not accommodate the latest version of the Guidance.
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It is organised over 11 Chapters with the first chapter providing a helpful overview of this complex topic. Inevitably, the book is littered with abbreviations since it reflects the terminology of the new test.
Chapters 2, 3 & 4 of the book deal with the three new sets of tests which are applied to determine residence for a particular tax year. Chapter 5 tackles the question of residence in the tax year of death and chapter 6 addresses the complexity of how to approach a split year. Unlike the old concessionary treatment the SRT contains the concept in the legislation. The effect of a tax year being split is to relax the rule which treats an individual who is resident ‘for’ a tax year as being resident at all times in that year.
Chapter 7 sets out the anti-avoidance provisions while chapters 8, 9 and 11 address ordinary residence and domicile. Chapter 10 sets out HMRC’s record keeping requirements as stated in their Guidance from May 2013.
The book makes extensive reference to the examples contained in HMRC’s Guidance but somewhat confusingly uses its own numbering system which makes it hard to check which of them have been altered in the Guidance published in August 2013. It also contains many original examples.
Writing this book must have been frustrating with the changes to the draft Bill and Guidance occurring whilst it was being written. For example, the Appendix to Chapter 3 reflects changes made to the initial draft of one of the automatic residence tests to clarify an ambiguity. However, it is written in a lucid style drawing on the writer’s experience as an international tax consultant and lecturer.
This book provides an early overview of what is an undoubtedly complex change in legislation that will take some time to become familiar to practitioners. The writer has provided a detailed summary of the key principles in an organised fashion. However, practitioners new to this subject might have welcomed a flow chart to understand more easily the structure of the test.
Practitioners act for all sorts of clients operating across borders from lorry drivers to airline pilots to those ‘at leisure’ and self- employed entrepreneurs. This book provides a useful starting point to everyone.
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