Temporary non-residence—post 5 April 2013 departures
Produced in partnership with Stephen Parnham
Temporary non-residence—post 5 April 2013 departures

The following Private Client practice note produced in partnership with Stephen Parnham provides comprehensive and up to date legal information covering:

  • Temporary non-residence—post 5 April 2013 departures
  • Temporary non-residence—statutory anti-avoidance rule
  • Residence periods
  • Treaty non-residence
  • Remittance basis users
  • CGT implications
  • Assets owned before departure
  • Assets acquired after departure
  • Income tax implications
  • Distributions from close companies
  • More...

Temporary non-residence—post 5 April 2013 departures

Temporary non-residence—statutory anti-avoidance rule

The statutory test for non-residence includes a general anti-avoidance rule to counteract tax advantages which might otherwise be achieved should an individual be non-UK resident for a short period only. The anti-avoidance rule is contained in paragraphs 109–144 of Schedule 45 to the Finance Act 2013 (FA 2013).

As the statutory test operates separately in relation to each tax year, it is possible for an individual to be non-UK resident for one or a limited number of tax years even if UK resident both before and after.

The anti-avoidance rule is designed to prevent people from becoming non UK-resident for a relatively short period of time and, during this time, crystallising substantial income or gains which are not taxable in the UK due to the person’s residency status. The targets of the anti-avoidance rule are therefore sources where the timing of receipts can be determined by the emigrating person on income and gains which have effectively been accumulated prior to leaving the UK. Such UK tax avoidance is prevented by taxing the income and gains in the tax year in which the person returns to the UK.

The rules also prevent remittance basis users from remitting pre-departure income and gains tax-free during short periods of non-UK residence. Where a remittance basis user becomes UK resident after a period of

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