Ordinary residence ― years to 5 April 2013

By Tolley
Personal_tax_img

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Ordinary residence ― years to 5 April 2013
  • Introduction
  • What is ordinary residence?
  • How does it differ from residence and domicile?
  • Why did ordinary residence matter for years up to and including 2012/13?
  • How do you know if your client was ordinarily resident for years up to and including 2012/13?
  • HMRC guidance on ordinary residence for years up to and including 2012/13
  • Reporting for years up to and including 2012/13

Ordinary residence was abolished from 6 April 2013. Overseas workday relief was retained and put on a statutory footing. There are transitional provisions for up to three years for those who are not ordinarily resident in the UK and who are adversely affected by the changes.

This guidance note considers the rules in the tax years up to 5 April 2013. It will remain important to be aware of the old rules as it may impact enquires or discovery assessments which relate to the 2012/13 tax year and previous tax years.

The transitional rules for ordinary residence are discussed in the Ordinary residence ― transitional rules (2013/14 to 2015/16) guidance note. Overseas workday relief (and the associated special mixed fund rules) are discussed in the Overseas workday relief and special mixed fund rules guidance note.

Introduction

Until 5 April 2013, ordinary residence was one of three key factors you needed to consider when deciding whether, or to what extent, an individual was liable to tax in the UK. The others were residence and domicile. Residence refers to the individual’s tax status on a year by year basis, ordinary residence looks at the position over the longer term, and domicile is the place which a person regards as his true home. See the Residence ― overview and Domicile guidance notes for more detail.

This note explains what is meant by ordinary residence, how it differs from residence and from domicile, why it was important, and how not ordinarily resident (NOR) status should have been reported to HMRC.

For the particular issues which arose for those who came to the UK or went overseas, see the Ordinary residence ― issues on coming to the UK up to 5 April 2013 and Ordinary residence ― issues on leaving the UK up to 5 April 2013 guidance notes.

Important

More on Residence, remittance etc: