UK INCOME TAX

Individuals resident in the UK are liable to UK Income Tax on their worldwide income arising in a tax year

Individuals resident in the UK are liable to UK Income Tax on their worldwide income arising in a tax year

Residence and ordinary residence

The terms 'residence' and 'ordinary residence' are not defined in the Taxes Acts. The guidelines to their meaning in this Chapter and in Chapters 2 (residence status of those leaving the UK) and 3 (those coming to the UK) are largely based on rulings of the Courts. This booklet sets out the main factors that are taken into account, but we can only make a decision on your residence status on the facts in your particular case. As mentioned in paragraph 1.4, even if you are resident (or ordinarily resident) in the UK under these rules, the terms of a double taxation agreement with another country might affect your final tax position if, for example, you are resident in both that country and the UK.

Residence

To be regarded as resident in the UK you must normally be physically present in the country at some time in the tax year. You will always be resident if you are here for 183 days or more in the tax year. There are no exceptions to this. You count the total number of days you spend in the UK - it does not matter if you come and go several times during the year or if you are here for one stay of 183 days or more. If you are here for less than 183 days, you may still be treated as resident for the year under other tests For periods prior to 6 April 2008, the normal rule is that days of arrival in and departure from the UK are ignored in counting the days spent in the UK, in all the various cases where calculations have to be made to determine your residence position - see for example paragraphs 2.2, 3.3 and 3.4 and the examples in 2.10 and 3.6. (This rule is not relevant to the concessionary split year treatment described in paragraphs 1.5 -1.6, where a person coming to or leaving the UK part way through a tax year is resident from the date of arrival or to the date of departure.) From 6 April 2008 onwards, when you are in the UK at the end of a day, i.e. at midnight, that day will count as a day of presence in the UK for residence purposes. An exemption is made for passengers who are in transit between two places outside the UK. Any day spent in transit through the UK (that is where you arrive in the UK in one day and depart to continue your journey on the next day); will not count as a day of presence in the UK for residence purposes. This exemption will only be given as long as you do not take part in any activity that is unrelated to your passage ...