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HMRC internal manual

Tax Credits Technical Manual

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HM Revenue & Customs
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Living in the UK: the 3 month rule

Meaning of 3 month rule for Child Tax Credit

Tax Credits (Residence) Regulations 2003 regulation 3

For claims made on or after 1 July 2014, regulation 3(6) of the Tax Credits (Residence) Regulations 2003, require that a claimant will only fulfil the statutory condition of entitlement for Child Tax Credit of “being in the United Kingdom” if he/she has been living in the United Kingdom for three months ending on the first day of the week in respect of which a claim is made (“the three month rule”) unless they meet a number of exceptions set out in regulation 3(7) of the Tax Credits (Residence) Regulations 2003.

Regulation 3(7) of the Tax Credit (Residence) Regulations 2003 details the exceptions to the three month rule. The three month rule will not apply where the person:

  1. most recently entered the United Kingdom before 1st July 2014;
  2. is a worker or a self-employed person in the United Kingdom for the purposes of Council Directive 2004/38/EC;
  3. retains the status of a worker or self-employed person in the United Kingdom pursuant to Article 7(3) of Council Directive 2004/38/EC;
  4. is treated as a worker in the United Kingdom pursuant to regulation 5 of the Accession of Croatia (Immigration and Worker Authorisation) Regulations 2013 (right of residence of a Croatian who is an “accession State national subject to worker authorisation”);
  5. is a family member of a person referred to in sub-paragraphs (b), (c), (d) or (i);
  6. is a person to whom regulation 4 applies (persons temporarily absent from the United Kingdom) and who returns to the United Kingdom within 52 weeks starting from the first day of the temporary absence;
  7. returns to the United Kingdom after a period abroad of less than 52 weeks where immediately before departing from the United Kingdom that person had been ordinarily resident in the United Kingdom for a continuous period of 3 months;
  8. returns to the United Kingdom otherwise than as a worker or self-employed person after a period abroad and where, otherwise than for a period of up to 3 months ending on the day of returning, that person has paid either Class 1 or Class 2 contributions by virtue of regulation 114, 118, 146 or 147 of the Social Security (Contributions) Regulations 2001 or pursuant to an Order in Council having effect under section 179 of the Social Security Administration Act 1992;
  9. is not a national of an EEA State and would be a worker or self-employed person in the United Kingdom for the purposes of Council Directive 2004/38/EC if that person were a national of an EEA State;
  10. is a refugee as defined in Article 1 of the Convention relating to the Status of Refugees done at Geneva on 28th July 1951, as extended by Article 1(2) of the Protocol relating to the Status of Refugees done at New York on 31st January 1967;
  11. has been granted leave, or is deemed to have been granted leave, outside the rules made under section 3(2) of the Immigration Act 1971 where that leave is—
* granted by the Secretary of State with recourse to public funds, or 
* deemed to have been granted by virtue of regulation 3 of the Displaced Persons (Temporary Protection) Regulations 2005;
  1. has been granted leave to remain in the United Kingdom by the Secretary of State pending an application for indefinite leave to remain as a victim of domestic violence;
  2. has been granted humanitarian protection by the Secretary of State under Rule 339C of Part 11 of the rules made under section 3(2) of the Immigration Act 1971.

In these exceptions, a “family member” means a person who is defined as a family member of another person in Article 2 of Council Directive 2004/38/EC.

What is meant by ‘living in’ the UK?

This expression is not defined in the regulations and as such should be given its ordinary everyday meaning. The New Oxford English Dictionary says that to ‘live’ somewhere means to ‘make one’s home in a particular place’. The Shorter Oxford English Dictionary says that ‘living’ means dwelling in a specified place.

Temporary absences during the three month period

Where a person who is required to meet the three month rule is temporarily absent from the UK HMRC will make a judgement on whether the claimant ceased to be living in the UK during their absence. A common sense approach will be applied to the normal everyday meaning of ‘living in’ and all the facts and circumstances of the case will be looked at, including the reason for the departure and the length of time absent from the UK (see examples 1, 2 and 3 below).

Example 1

Absence from the UK: Ilona is a German national. She came to the UK alone on 2 July 2014 to look for work. She rented a bedsit on a short-term one month tenancy. Ilona returned to Germany on 1 August 2014. In Germany she and her children stayed with her mother in the family home until 30 September 2014. She didn’t work in Germany during that time. Ilona came back to the UK with her children on 30 September 2014 and took up a six month tenancy on a flat and was actively looking for work. Ilona claimed Child Benefit and Child Tax Credit from 30 September 2014. HM Revenue & Customs decided that although Ilona met all other conditions of entitlement, including having a right to reside here as a jobseeker, as she had not been living in the UK for the three months before 30 September 2014, Ilona was not entitled to either Child Benefit or Child Tax Credit. It was determined that her absence of over one month from the UK meant that Ilona had ceased to live in the UK and so the 3 month period would need to be recalculated with 30 September 2014 as the starting date.

Example 2

Temporary absence from the UK: On 9 October 2014 Frederic, a Belgian national, came to the UK with his child Peter to look for work. He made a claim for Child Benefit and Child Tax Credit on 14 January 2015. On questioning his claims it emerged that, since arriving, Frederic had lived in a rented flat in the UK and that he had spent from 2 December 2014 to 15 December 2014 in Belgium. His father had died and he and Peter attended the funeral in Belgium and had stayed in his mother’s house. It was decided that Frederic had lived in the UK continuously for three months before making a claim. In these circumstances the 2 week absence did not mean that Frederic had ceased to live in the UK and that he had satisfied the 3 month condition on 9 January 2015.

Example 3

Absences from the UK: Daan, a Dutch national, arrived in the UK with his son on 6 July 2014 in order look for work and he stayed in a hotel. Daan claimed Child Tax Credit 7 October 2014. On reviewing his claim, it emerged that Daan and his son had spent two weeks, on three separate occasions, at his flat in Amsterdam which he owns and has lived in since 2001. On 19 October 2014 HM Revenue & Customs decided that, although Daan had an EU right to reside as a jobseeker, he had not lived in the UK for the 3 months before becoming eligible to Child Tax Credit. HM Revenue & Customs considered that during his absences in the Netherlands Daan had ceased to live in the UK for the purposes of the 3 month condition.

Claimants from who have arrived in the UK after a period of residence in another EEA country

Article 6 of Regulation (EC) 883/2004

Where a person who claims Child Tax Credit has completed a period of residence in another Member State immediately before arriving in the United Kingdom which is, or would be, taken into account under the legislation of that Member State for the purposes of acquiring a right to claim their family benefits, that period of residence should be aggregated with any periods of residence in the United Kingdom when deciding whether the claimant satisfies the three month rule for the purposes of claiming Child Tax Credit.

The Member State where a qualifying period of residence is required as part of their entitlement conditions for one or more of their family benefits are:

  • Croatia
  • Cyprus
  • Denmark
  • Hungary