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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

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HM Revenue & Customs
Updated
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Residence: Liability to UK Tax: Scope of liability to income tax for trade, profession, vocation and rental property

Table 3 - Scope of liability on trade, profession or vocation income

Your UK Domicile status Your UK residence status Arising Basis (AB) or Remittance Basis claimed (RB) Trade or Profession carried on wholly or partly in the UK Trade or profession carried on wholly outside the UK
         
Domiciled within UK 1. Resident and Ordinarily Resident AB Liable Liable
Domiciled within UK 2. Resident and Not Ordinarily Resident 2(a) AB Liable Liable
Domiciled within UK 2. Resident and Not Ordinarily Resident 2(b) RB Liable Liable on remittance
Domiciled within UK 3. Not Resident AB² Liable Not Liable
Domiciled outside UK 4. Resident and Ordinarily Resident 4(a) AB Liable Liable
Domiciled outside UK 4. Resident and Ordinarily Resident 4(b) RB Liable Liable on remittance
Domiciled outside UK 5. Resident and Not Ordinarily Resident 5(a) AB Liable Liable
Domiciled outside UK 5. Resident and Not Ordinarily Resident 5(b) RB Liable Liable on remittance
Domiciled outside UK 6. Not Resident AB Liable Not Liable

Note: Use of this table is subject to any different treatment provided for under the terms of the relevant article in a Double Taxation Agreement.

Earnings from a trade, profession or vocation

Resident: When an individual is liable to UK tax on the arising basis (AB) they are taxed in the UK on their earnings from the trade, profession or vocation, whether the trade, profession or vocation is carried out in the UK or abroad.

If the individual is liable to UK tax on the remittance basis (RB), their earnings from any trade, profession or vocation carried out in the UK are taxed in the UK but any earnings from a trade, profession or vocation carried out wholly outside the UK will be taxed only if they are remitted here.

Not Resident: Although an individual is not resident in the UK they will still pay UK tax on any income or profits from a trade, profession or vocation that they carry out wholly in the UK.

An individual will not pay UK tax on any income or profits from a trade, profession or vocation that is carried out wholly abroad.

If an individual carries out their trade, profession or vocation partly in the UK and partly outside the UK they will pay UK tax on the income or profits from the part of the trade, profession or vocation carried out in the UK.