Abolition of ordinary residence from 6 April 2013 and transitional rules to 5 April 2016
Produced in partnership with Tolley Guidance
Abolition of ordinary residence from 6 April 2013 and transitional rules to 5 April 2016

The following Private Client guidance note Produced in partnership with Tolley Guidance provides comprehensive and up to date legal information covering:

  • Abolition of ordinary residence from 6 April 2013 and transitional rules to 5 April 2016
  • Effect on tax provisions which use the concept of ordinary residence
  • Transitional provisions
  • Overseas workday relief
  • Provisions which retain the concept of ordinary residence

Until 5 April 2013, ordinary residence was one of three key factors that needed to be considered when deciding whether, or to what extent, an individual was liable to tax in the UK. The other factors being residence and domicile. For tax years 2013/14 onwards, the concept of ordinary residence is abolished, subject to transitional provisions. For an explanation of the concept of ordinary residence, see the Ordinary residence before 6 April 2013 Practice Note and for guidance on the tax implications of ordinary residence before 6 April 2013, see the Tax implications of ordinary residence before 6 April 2013 Practice Note.

In most cases, the abolition of ordinary residence came into effect on 6 April 2013. It applies for income tax, capital gains tax (CGT), inheritance tax (IHT) and corporation tax.. However, ordinary residence is retained in a small number of distinct areas of the legislation (see: Provisions which retain the concept of ordinary residence below).

There are a number of transitional provisions to ensure that the negative aspects of the abolition of ordinary residence are mitigated as far as possible.

This Practice Note comments on the effect of the abolition of ordinary residence on various tax provisions and also looks at the transitional provisions.

Effect on tax provisions which use the concept of ordinary residence

Before 6 April 2013 there were