Statutory Residence Test - HM Revenue & Customs

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Period of temporary non-residence you will be treated as having remitted that relevant foreign income to the UK in the period of your return. This replaces and updates the existing temporary non-residence charge. RDRM32510 contains detail of the rules. Example 46 Marie returned to the UK during the tax year 2018–19 after a period of residence abroad. She originally left the UK to become resident abroad on 2 September 2013 (end of period A) and so her year of departure was 2013–14. She had been resident in the UK for the seven years before her departure and claimed the remittance basis in those years. While Marie was resident abroad she remitted to the UK the following relevant foreign income (RFI): - £15,000 RFI from 2009–10 remitted in 2014–15 - £18,000 RFI from 2010–11 remitted in 2014–15 - £18,000 RFI from 2011–12 remitted in 2015–16 - £20,000 RFI from 2012–13 remitted in 2016–17 Total £71,000 As she was not resident in the UK, this income was not taxed when remitted here. On her return to the UK on 1 June 2018 (the beginning of the UK part of split year 2018-19), Marie is within the special rules because her period of temporary non-residence was less than five years. She will be liable to UK tax on these earlier remittances which took place when she was temporarily nonresident. They will be chargeable to UK tax in 2018-19, the tax year of her return. Distributions from closely controlled companies 6.17 Where you receive, or become entitled to, distributions from a UK or overseas company during a period of temporary of non-residence, and the company: is a close company, or if it is an overseas company, it would have been a close company had it been UK resident and you are either, a material participator in the company, or RDR3 76
Period of temporary non-residence an associate of such a participator at a point within the tax year of departure (the UK part if split year treatment applies) or the previous three years, then the distributions are charged to UK tax as if you received them in the period of your return. 6.18 If the distribution is a dividend, the charge does not apply to dividends that relate to trade profits that arose in the period of temporary non-residence. 6.19 Detailed guidance will be provided in due course and a link to that guidance will appear here. Loans to participators released or written off 6.20 If you have received a loan or an advance from a company, and that loan or advance is released or written off whilst you are temporarily non-resident, a charge arises at the time, regardless of whether you are UK resident. However, this charge may be removed under the terms of double taxation agreements between the UK and the country in which you are temporarily resident. When the original charge is removed under these conditions, a new liability will arise on the period of your return. CTM61630 will be updated to provide detailed guidance for these rules. Chargeable event gains 6.21 Where a chargeable event gain arises on a: life insurance life annuity, or capital redemption policy, when you are temporarily non-resident, you will be liable to tax on the gain in the period of your return. For more details of the policies affected by this charge, see IPTM3300. Detailed guidance will be provided in due course and a link to that guidance will appear here. Capital gains 6.22 If you have a capital gain that arises in a period when you are temporarily non-resident (including any gains attributed to you), and the gains are not already charged by other provisions, then the gains will be chargeable to Capital Gains Tax for the period of return. This replaces and updates the existing temporary non-residence provisions, details of which are in CG26100. Detailed guidance will be provided in due course and a link to that guidance will appear here. RDR3 77
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