Bona Fide Residence Test

Hello All,

Just a quickie question about the bona fide residence test.  I understand that any day in which you travel across international waters (such as back to the US) does not count toward the bona fide residence test.  My question is this: when one flies across the channel to Europe, does that count as a day over international waters?

It's won't amount to a huge difference, but the number of trips I've taken to Europe this year may mean the difference between being a "resident" at the end of April versus somewhere in the middle of May.  And, given that I could be looking at a sizable tax refund, the sooner I can file, the better!

Can anyone shed some light on this?

By the way, Lizzit (and everyone else) thank you for the fantastic help you've already provided to others on the forum-- it's saved me much time, and made this whole process a lot less daunting.

Kind regards,

Steve

Erp... I think I meant Physical Presence Test, not Bona Fide Residence test, but I'm not really sure... Even after reading the IRS docs, I'm still not clear on the difference, or if there's a benefit of one over the other.

D'oh!  Why do they make this so complex??

My personal situation, if it makes a difference:
Arrived in the UK from California on May 28th 2006, went back at Christmas from 23rd - 30th December, went on to Canada from there until the 6th, arrived in the UK on the 7th January.

The rest of my trips have been to/from continental Europe.

Many thanks,

Steve

US rules:  a partial day in the US counts as a whole day.
UK rules:  a partial day in the UK does NOT count.

The English Channel is international waters.  US waters are something like about 10 or 20 miles offshore of the US; maybe 100; I don't know.  Whatever it is, the Channel's going to fall pretty far outside the limits of US waters.

Therefor, a Channel day is a non-US and non-UK day. 

Are you saying that a holiday outside the UK would take away days from being considered a resident?

How many days is it 330?  Is this a US tax thing only?

Yael,

For US, you want to be outside the country for 330 days OR a bona fide resident of another country.  Under the 330 day rule, it doesn't matter what or where, as long as it ain't USA.  Under the bona fide residence test, you must meet the definition of UK resident for the entire period. 

For UK, residency is >180 days in the UK during a UK tax year.  There are other definitions with other day restrictions as well; for purposes of this discussion, that's the important factor.

Thus, if you arrived in the UK late in the UK tax year, you might be UK nonresident, so you would have to meet the 330 day test instead. 

Most people use the 330 day rule for the first year and bona fide residence thereafter.  You may prefer to seek additional paid help if the rules and regulations are causing you frustration and grief.