Taxpayers in Scotland

The Scotland Bill received Royal Assent on 1 May 2012 and became the Scotland Act 2012. The Act introduces the Scottish rate of income tax, which is expected to be implemented in April 2016.

HMRC issued an income tax technical note Clarifying the Scope of the Scottish Rate of Income Tax which looks at the following areas:

  • Definition of a Scottish taxpayer
  • General issues
  • Charitable giving
  • Pensions tax relief
  • Trustee and personal representation
  • Other income tax issues

It highlights the steps which define who will be a Scottish taxpayer that have been inserted into the The Scotland Act 2012. The technical note states:

“Firstly, in order for an individual to be a Scottish taxpayer, they must be UK resident for tax purposes – an individual who is not UK tax resident cannot be a Scottish taxpayer.

The remaining parts of the definition are based on the location of an individual’s sole or main place of residence. If they have one place of residence and this is in Scotland, they are a Scottish taxpayer.

Individuals who have more than one place of residence in the UK need to determine which of these has been their main place of residence for the longest period in a tax year – if this is in Scotland, they are a Scottish taxpayer.”

“Individuals who cannot identify a main place of residence will need to count the days they spend in Scotland and elsewhere in the UK – if they spend more days in Scotland, they will be a Scottish taxpayer.”