Residence of individuals

The tax residence of an individual has long been relevant in determining liability to income tax and capital gains tax (CGT). As is explained in Practice Note: Introductory guide to residence and domicile for UK tax purposes before 6 April 2025 [ARCHIVED], those resident in the UK are taxable on their worldwide income and gains. Non-residents, by contrast, are taxable only on certain sources of UK income, and their capital gains are in general free from tax.

Before 6 April 2025, tax residence was not relevant to inheritance tax (IHT); rather, domicile was the key factor determining liability to IHT—see Practice Note: Domicile However, since 6 April 2025, liability to IHT is based on residence in the UK. For more information, see:

Prior to 6 April 2013, ordinary residence applied as a distinct concept from residence and domicile for UK tax purposes. The concept of ordinary residence was removed and replaced with references to residence from 6 April 2013. But under transitional rules, ordinary residence continues to apply to certain individuals who were resident in the UK for the tax year 2012/13, but who were not

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Private Client News

OSCR announces enhanced Record of Removed Persons search functionality for charity trustees

The Office of the Scottish Charity Regulator (OSCR) has announced technical improvements to its Record of Removed Persons search function. The updated system now displays detailed search results—including timestamps and search terms—even when no matches are found. This enhancement is designed to help charity trustees document their due diligence processes by allowing them to capture evidence of eligibility checks via screenshots. The Record of Removed Persons continues to list individuals barred from charity management by the Court of Session.

Private Client weekly highlights—24 July 2025

This week’s edition of Private Client highlights includes: (1) analysis of the draft provisions to be included in Finance Bill 2026 which were published on Legislation Day, 21 July 2025; (2) reforms to the registration requirements of the Trust Registration Service (TRS) as part of the government’s response to the 2024 Money Laundering Regulations consultation; (3) double taxation tiebreakers—the meaning of POEM (Haworth v HMRC); and (4) a monumental Supreme Court decision on matrimonialisation and sharing principle on divorce (Standish v Standish).

Question of the week: W died on 06 April 2025. She was resident in England & Wales at her death and all her assets were situate in England & Wales. In 2018 (ie within seven years of her death) W and her husband H made joint lifetime gifts totalling £600,000 to their three children. At the time of the gifts, they were arguable domiciled in Gibraltar, and the gifts were made from Gibraltar-based assets. H died in 2021 domiciled in Gibraltar. Do the lifetime gifts have to now be brought into account for IHT in W's estate in relation to both her NRB and the transferable NRB from H's estate?

This Q&A considers the implications for inheritance tax (IHT) when a resident passes away. Specifically, it examines the scenario where lifetime gifts were made within seven years of death, and the deceased and their spouse were domiciled in a different jurisdiction at the time of the gifts. It also addresses how these gifts impact the deceased's estate, including the transferable nil rate band (NRB) from the spouse's estate.

Legislation Day: Draft Finance Bill 2026—Private Client analysis

Private Client analysis: On Legislation Day, 21 July 2025, the government published draft provisions to be included in Finance Bill 2026 (FB 2026, also known as Finance Bill 2025–26) together with accompanying explanatory notes and other supporting documents. The government also published consultation responses and made other announcements of interest to Private Client practitioners. This analysis provides an overview of the key Private Client tax provisions together with initial reactions from the market.