| For tax purposes
UK residence is expressed in terms of "residence"
and "ordinary residence".
Resident
You will always be considered resident in the UK if you
are here for 183 days or more in a tax year. In strictness
you will also be considered resident for the whole of a
tax year, even if you spend only part of it here. However,
in years of arrival and departure, the year may, by concession,
be split into resident and
non-resident periods.
Ordinarily Resident
Your ordinary residence status will depend on factors such
as your intentions when you first arrive in the UK, the
accommodation you occupy and the anticipated length of stay.
The basic rules are:
• If you intend, from the outset, to remain in the
UK for three or more years, you will be regarded as ordinarily
resident throughout the period of your assignment;
• If you intend to remain in the UK for less than
three years but buy a house or acquire accommodation under
a lease of three years or more, the Inland Revenue will
regard you as ordinarily resident from the beginning of
the tax year in which the property or lease was acquired.
If however, you subsequently leave the UK within three years
and dispose of the property, you are allowed retrospectively
to change your ordinary residence status if this is to your
advantage;
• If you come to the UK with no definite length of
stay in mind and occupy temporary accommodation you will
be regarded as ordinarily resident from the beginning of
the tax year following your third anniversary of arrival;
• If you are initially considered not ordinarily resident
in the UK (see below), but your intentions change and you
expect to remain in the UK for more than three years, or
you purchase accommodation in the UK, you will be treated
as ordinarily resident from the beginning of the tax year
in which either event takes place. If the event takes place
in the year of arrival in the UK, you will be regarded as
ordinarily resident from your date of arrival.
Being "ordinarily resident" means that you will
be taxed on your worldwide earnings, although in certain
instances it is possible to avoid UK tax on earnings relating
to days spent working outside the UK if an appropriate structure
is put in place by your employer.
Not Resident or Resident but Not
Ordinarily Resident
If you come to the UK to work here and
you do not buy a house or take a lease of three years or
more, the following rules will apply:
If you intend to stay less than two
years…
• you will be resident for the whole of any tax year
in which you spend 183 days or more here;
• you will be not resident for the whole year if you
spend less than 183 days in the UK;
• you will be regarded as not ordinarily resident
for the duration of your assignment.
If you intend to stay two to three years…
• you will be regarded as resident for the whole period
of your assignment from the date of your arrival;
• you will be regarded as not ordinarily resident
for this period.
Being "not resident" or being "resident
but not ordinarily resident" means that you will only
be liable to UK tax on earnings relating to days spent working
in the UK. However, if you are considered "resident
but not ordinarily resident" care must be taken to
ensure that the earnings relating to days spent working
outside the UK are paid and kept outside the UK.
|
