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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Residence or employment in the United Kingdom:

Extra-Statutory Concession A11

Year of commencement or cessation of residence in the United Kingdom

The Taxes Acts do not provide for splitting a tax year for residence purposes. Strictly an individual resident in the United Kingdom for a tax year is chargeable on the basis of being resident for the whole year. By concession, when an employee’s liability is affected by residence status, he or she is chargeable only by reference to the period of residence in the United Kingdom in the year if the employee:

  • is “resident” here for part of a tax year and
  • is “not ordinarily resident” here for the other part of the year.

The effect of the concession is normally taken into account by stating the individual’s residence status as though the year was split (see RE1740).

The full text of Extra-Statutory Concession A11 is:

“A11. Residence in the United Kingdom: year of commencement or cessation of residence

The Income and Corporation Taxes Acts make no provision for splitting tax years in relation to residence and an individual who is resident in the United Kingdom for any year of assessment is chargeable on the basis that he is resident for the whole year.

But where an individual:

* comes to the United Kingdom to take up permanent residence or to stay for at least two years, or
* ceases to reside in the United Kingdom if he has left for permanent residence abroad,

liability to United Kingdom tax which is affected by residence is computed by reference to the period of his residence here during the year. It is a condition that the individual should satisfy the Board of Inland Revenue that prior to his arrival he was, or on his departure is, not ordinarily resident in the United Kingdom. The concession would not apply, for example, where an individual who had been ordinarily resident in the United Kingdom left for intended permanent residence abroad but returned to reside here before the end of the tax year following the tax year of departure.

This concession is extended to the years of departure and return where, subject to certain conditions, an individual goes abroad for full time service under a contract of employment. These conditions are:

* the individual’s absence from the United Kingdom and the employment itself both extend over a period covering a complete tax year, and
* any interim visits to the United Kingdom during the period do not amount to
    * 183 days or more in any tax year, or
    * an average of 91 days or more in a tax year (the average is taken over the period of absence up to a maximum of four years), and  
* for years up to and including 1992-93, all the duties of the employment are performed abroad or any duties the individual performs in the United Kingdom are incidental to duties abroad.

Where the concession applies and the tax year is split, Section 128 Finance Act 1995 (limit on income chargeable on non-residents: income tax) does not apply for the period for which an individual is treated as not resident. That Section only applies to complete years of non-residence.”