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HMRC internal manual

International Manual

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HM Revenue & Customs
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Description of double taxation agreements: Residence

This Article deals with the question of residence. A person is a resident of a country if they are is liable to tax therein by reason of their domicile, residence, place of management or other criterion of a similar nature. It does not include any person who is liable to tax in one country only on income from that country or on capital situated therein. A person’s domicile, in accordance with the laws of the United Kingdom, has no relevance in determining whether he is resident in the United Kingdom (although the fact that he may be taxable on the remittance basis may affect the claims to relief or exemption which he may make in respect of income arising in the other country - see INTM153320).

It should be noted that in double taxation agreements reference is made to `residents of’ one country or the other, whereas United Kingdom domestic law always refers to `resident in’ the United Kingdom.

A person can be resident in the United Kingdom under United Kingdom domestic law and therefore a resident of the United Kingdom for the purposes of a double taxation agreement and at the same time also be a resident of the other country under that country’s domestic law. Where a person, either an individual or a person other than an individual, is a resident of both countries, the Article provides tests for determining of which country a person is a resident for the purposes of the agreement. INTM154010 onwards sets out the procedure to be followed where a person who is resident in the United Kingdom under United Kingdom domestic law appears to be, or makes a claim to be, a resident of the other country.

INTM154010 onwards also covers the situation where a person with United Kingdom source income who is not resident here under United Kingdom domestic law claims relief from United Kingdom tax under an agreement as a resident of the other country under that agreement.