Temporary non-residence

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

  • Temporary non-residence
  • Introduction
  • Meaning of ‘temporary non-resident’ (year of departure 2013/14 onwards)
  • Income and gains within temporary non-residence rules (year of departure 2013/14 onwards)
  • Meaning of ‘temporary non-resident’ (year of departure pre-2013/14)
  • Income and gains within temporary non-residence rules (year of departure pre-2013/14)
  • Advising the taxpayer

Introduction

Anyone returning to the UK after a period of absence should consider whether the temporary non-residence anti-avoidance provisions apply. These rules tax certain income and gains realised during the period of non-residence in the year of return to the UK.

The rules that apply differ depending on whether the individual is treated as having a year of departure of 2013/14 (or later) or a year of departure pre-2013/14. Both sets of rules are considered below.

Meaning of ‘temporary non-resident’ (year of departure 2013/14 onwards)

An individual is a ‘temporary non-resident’ if certain conditions apply. They include a number of terms that are explained further below. The conditions are as follows:

  • he has ‘sole UK residence’ for a ‘residence period’
  • following the end of this sole UK residence period (termed ‘period A’ by the legislation), a residence period occurs for which the individual does not have sole UK residence
  • he had sole UK residence in the UK at any time during at least four of the seven tax years prior to the ‘year of departure’ (whether these were full tax years or split tax years), and
  • the period of non-residence in the UK is five years or less (this begins with the date on which the individual no longer has sole UK residence and ends on the day before he has sole UK residence again)

FA 2013, Sch 45, paras 110–111, 113; RDR3 , para 6.2

What is a ‘residence period’?

Each tax year is treated as a ‘residence period’ unless the tax year is split, in which case there are two residence periods (one period for the part of the year in which the individual is UK resident and one

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