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By by Robert Lee, Tax-News.com, London
07 July, 2016
The Chartered Institute for Securities and Investment (CISI) has recommended that UK citizenship be used in addition to UK residency as the qualifying tests for liability to UK tax.
CISI CEO Simon Culhane said: "We could greatly simplify the collection of UK tax, and spread the load more fairly, if we moved away from just operating a residence test when determining whether an individual should pay tax."
Writing in The Review, the CISI members' magazine, Culhane explained: "We believe that this system should be changed so that anyone who is a UK passport holder is also liable to pay tax on their worldwide income in exactly the same way as US citizens are taxed on their worldwide income, irrespective of where they live. Of course there are double taxation treatments in most countries, so a citizen who is resident outside the US doesn't pay twice."
Culhane added that establishing UK citizenship alongside UK residency as the qualifying factors for the payment of UK taxes would mean that it no longer mattered if an individual was in the UK for 16 days, 90 days, or 183 days, all currently key time periods for determining residency.
He said: "It will avoid the nonsense of midnight flights and sub-optimal planning as individuals, usually highly paid and with a high net worth, take steps to ensure they don't overstay their time in the UK in a given tax year. The citizenship/residency tests would mean those seeking lower tax havens can still do so, and they can run empires and businesses from anywhere in the world – but if they want the benefits and rights of UK citizenship they must accept their responsibilities to pay their fair dues and contribute to the UK Exchequer."
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