IR 20 Residence and Domicile - a unique opportunity

This is a first (I think). HMRC are seeking input from anyone and everyone to assist them in updating their IR20 guidance. During my long time involvement with the ICAEW Tax Faculty I have contributed to many, many representations and responses to consultations documents. Whilst these are invariably published on HMRC website it is rare (if not unprecedented) for HMRC to openly seek input to an update of their guidance. It's a good move and one I applaud.

When I used to be in practice IR20 was effectively the 'bible' to which one referred when advising clients on the tax consequences of almost any residence related issue.

In normal circumstances we would all have treated IR20 the same as any other HMRC guidance. That is, simply as a statement of their views. But the guidance amplified the legislation and indicated a pragmatic approach by HMRC that provided a greater degree of certainty as regards how they would apply the law. It was invaluable.

All this changed however when HMRC argued against their own guidance in the Gaines Cooper case. They won before the Commissioners and at the High Court. Subsequently the Government changed certain aspects of the law concerning residence and domicile. The profession has since been waiting to see an updated version of IR20. It is evidently out of date in many respects now but apparently will not be formally withdrawn until next March when the new guidance should become available.

So if you have any clients affected by the tax laws related to residence and/or domicile you may care to identify the key issues which currently prevent you from providing definitive advice. Equally you may want to obtain specialist advice on such matters, in which case I do hope you will speak to one of the members of the Tax Advice Network. (You can use the 'search' facility - top right of this page - to access relevant profiles and then make your choice using whatever criteria are right for you).