The UK tax authority HMRC has issued for consultation draft technical guidance on the definition of a Scottish taxpayer for the application of the Scottish rate of income tax which was introduced by the Scotland Act 2012. The rate will be charged on income that is not savings or dividend income with effect from April 2016.
The guidance first clarifies that an individual who is not a UK resident for tax purposes cannot be a Scottish taxpayer. The question of whether a UK resident individual is a Scottish taxpayer will be determined on the basis of the location of the individual’s sole or main place of residence. A UK taxpayer who has only one place of residence and this is in Scotland will be a Scottish taxpayer.
An individual with more than one UK residence must determine which of these has been the main place of residence for the longest period in the tax year. If this is in Scotland then the individual is a Scottish taxpayer. If an individual cannot identify a main place of residence it will be necessary to add up the number of days spent in Scotland and spent elsewhere in the UK. If more days were spent in Scotland then the individual is a Scottish taxpayer.
An individual who meets the definition of a Scottish taxpayer will be regarded as a Scottish taxpayer for the whole of that tax year.
HMRC is inviting comments on whether the draft technical guidance provides clarity on determining Scottish taxpayer status. Any responses should be sent to HMRC by 31 July 2015.
