Residence ― overview

By Tolley

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

  • Residence ― overview
  • Introduction
  • Tax implications of UK residence
  • Residence (2013/14 onwards)
  • Residence (pre 2013/14)
  • Reporting non-resident status to HMRC
  • Dual residents


Residence is an important tax concept as it determines whether an individual is liable to UK income tax, capital gains tax and inheritance tax. Residence must be decided on a year-by-year basis.

Until 2013/14, the statutory definition of residence was very brief. In order to determine someone’s residence status it was necessary to consult the extensive case law on the subject and heavy reliance was placed on guidance published by HMRC. Although the individual is entitled to rely on the HMRC guidance if he falls clearly within it, several cases (most notably the Gaines-Cooper case), highlighted the short-comings of this guidance and left some individuals in an uncertain position.

R (Davies and James; Gaines-Cooper) v HMRC [2010] STC 860 at [33] (subscription sensitive)

It is against this background that a consultation into a potential statutory residence test was published in 2011. Due to the problems which were highlighted as part of the consultation process, the test was not legislated until 6 April 2013.

This guidance note provides an overview of:

  • the tax implications of UK residence
  • the statutory residence test which applies from the 2013/14 tax year onwards
  • the rules up to and including the 2012/13 tax year
  • dual residence
Tax implications of UK residence

Taxpayers who are resident in the UK are taxable on their worldwide income and gains.

ITTOIA 2005, s 6 (trading income); ITTOIA 2005, s 269 (property income); ITTOIA 2005, s 368 (savings and investment income); ITTOIA 2005, s 577 (royalties and intellectual property income)

There is an exception for UK residents who are not domiciled in the UK. They have the right to use the remittance basis for foreign income and gains.

More on Residence, remittance etc: