HMRC has updated its guidance on residence, domicile and the remittance basis (RDR1), specifically in relation to employees of EU institutions. This is in effect a post-Brexit update, noting at section 4.20 (‘Employees of the EU’) that, where a UK-resident individual leaves the UK after 31 December 2020 to take up employment with an EU institution, their residence status will change (becoming a Luxembourg resident, for example).
Although the guidance does not expand any further on the point, this appears to be the default position after Brexit. When the UK was a member of the EU, individuals leaving to work for the EU would be taxed under the special EU institution taxation rules which apply across the EU generally, meaning UK residence status would not impact on the individual’s tax position in respect of earnings from that employment. But, following Brexit, those special rules do not apply in the UK meaning that, if the individual were deemed to stay resident in the UK, they could in principle be taxed twice on the same income. Leaving the UK to take up employment elsewhere would appear to follow the split-year rules in the statutory residence test.
HMRC has updated its guidance on residence, domicile and the remittance basis (RDR1), specifically in relation to employees of EU institutions. This is in effect a post-Brexit update, noting at section 4.20 (‘Employees of the EU’) that, where a UK-resident individual leaves the UK after 31 December 2020 to take up employment with an EU institution, their residence status will change (becoming a Luxembourg resident, for example).
Although the guidance does not expand any further on the point, this appears to be the default position after Brexit. When the UK was a member of the EU, individuals leaving to work for the EU would be taxed under the special EU institution taxation rules which apply across the EU generally, meaning UK residence status would not impact on the individual’s tax position in respect of earnings from that employment. But, following Brexit, those special rules do not apply in the UK meaning that, if the individual were deemed to stay resident in the UK, they could in principle be taxed twice on the same income. Leaving the UK to take up employment elsewhere would appear to follow the split-year rules in the statutory residence test.
