INTM604540 - Transfer of assets abroad: History of the legislation: Ordinary residence and transitional arrangements

Ordinary Residence

Until 6 April 2013 an individual had to be ordinarily resident in the UK. To be ordinarily resident in the UK an individual’s residence in the UK had to be habitual over a few years (see RDRM10120).

Residence position from 6 April 2013

With the introduction of the new statutory residence test and the abolition of ordinary residence from 6 April 2013, an individual must be resident in the UK for the tax year if they are to be chargeable in respect of the income or benefits charges for that year.

Transitional provisions

For the purpose of the transfer of assets legislation there are transitional provisions for individuals who were resident in the UK for 2012-2013, but who were not ordinarily resident at the end of that tax year. The transitional provisions apply in these scenarios set out below.

Individual was resident in 2010-2011, 2011-2012 and 2012-2013

Here, for the tax year 2013-2014, the references in the transfer of assets provisions to being UK resident for that year are replaced by references to being ordinarily resident in the UK.

Individual was not resident in 2010-2011, but was resident in 2011-2012 and 2012-2013

Here, for the tax years 2013-2014 and 2014-2015, the references in the transfer of assets provisions to being UK resident for the years concerned are replaced by references to being ordinarily resident in the UK.

Individual was not resident in 2010-2011 or 2011-2012 but was resident in 2012-2013

Here, for the tax years 2013-2014, 2014-2015 and 2015-2016, the references in the transfer of assets provisions to being UK resident for the years concerned are replaced by the references to being ordinarily resident in the UK.

Note

The transitional provisions effectively retain the concept of ordinary residence for the years 2013-2014 to 2015-2016 in the limited situations set out above.