Ordinary residence

Produced by Tolley in association with Paul Tew
Employment Tax
Guidance

Ordinary residence

Produced by Tolley in association with Paul Tew
Employment Tax
Guidance
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Introduction to ordinary residence

Ordinary residence was abolished for most income tax purposes from 6 April 2013 but ordinary residence remains for the purpose of:

  1. blind person’s allowance

  2. income from Ulster Savings Certificates exemption

  3. certification of diplomatic exemption which is linked to ordinary residence outside the UK

More significantly, the concept of ordinary residence remains for the purpose of determining liability to National Insurance contributions (see the Residence and ordinary residence for social security purposes guidance note).

Ordinary residence was not defined for tax purposes prior to 6 April 2013 but was a common law concept. Ordinary residence will, therefore, continue as the same common law concept for non-tax purposes.

It is outside the scope of this guidance note to run through all the changes to the legislation resulting from the abolition of ordinary residence but prior to 5 April 2013, resident and ordinarily resident individuals could not claim OWR. Additionally, to be liable to capital gains taxation, individuals had to be resident or ordinarily resident. From 6 April 2013, they only

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Paul Tew
Paul Tew linkedinicon

Writer and advisor at Paywatch


Paul Tew is a freelance adviser, primarily in the areas of pay, personal taxation and remuneration planning. A frequent contributor to technical journals on pay and benefits issues, having written for the "In Business" section of the Times. Paul continues to supply articles for various recognised professional publications including Pay and Benefits magazine, Taxation magazine and Company's Secretary's Review. Paul also has had several loose leaf and bound books published on a variety of subject matter including PAYE, NIC, Sickness and Maternity Pay.Paul has written and presented training courses as well as headed up payroll and employment help desks and acted as an assessor for recognised Payroll/HR qualifications. Paul previously worked in the healthcare and oil sectors managing Pay and benefit services, so has many years of experience in dealing with PAYE and employment compliance issues across a broad range of industries and organisations.

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  • 12 Jun 2025 10:10

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