IR20 - Residents and non-residents liability to tax in the United ...

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This guidance does not apply from 6 April 2009. The guidance it contains is replaced by the guidance provided in HMRC6 – Residence, Domicile and the Remittance Basis. It is kept available for those people who need to make reference to IR20 for their tax affairs before 5 April 2009. • you come to the UK to work on 14 July 2005 on a 2� year contract of employment, but in December 2007 your assignment is changed and your contract is extended until after July 2008*. You are ordinarily resident from 6 April 2007. * If there is a change in the circumstances of your assignment, but no formal change to the terms of a contract, whether you are treated as ordinarily resident - and from what date - will depend on the precise facts. 3.11 If you come to, and remain in, the UK, you will be treated as ordinarily resident • from the day you arrive, if - you already own accommodation here - you buy accommodation during the tax year of arrival, or - you have or acquire accommodation on a lease of three years or more during the tax year of arrival; or • from 6 April of the tax year in which such accommodation becomes available, when this occurs after the year of arrival. 3.12 If you are treated as ordinarily resident solely because you have accommodation here (paragraph 3.11) and you dispose of the accommodation and leave the UK within three years of your arrival, you may be treated as not ordinarily resident for the duration of your stay if this is to your advantage. 3.13 If you are a student who comes to the UK for a period of study or education and you will be here for less than four years, you will be treated as not ordinarily resident, providing • you do not own or buy accommodation here, or acquire it on a lease of three years or more, and • on leaving the UK you do not plan to return regularly for visits which average 91 days or more a tax year. Contacting HM Revenue & Customs 3.14 You should let us know when you come to the UK. You will normally be asked to complete form P86, which will help to determine your residence status. Tax treatment after arrival in the UK 3.15 For details of the tax treatment of your earned income both in the UK and abroad (such as earnings from employments) after you have become resident in the UK, see Chapter 5 and in particular paragraphs 5.1 - 5.3, 5.9 - 5.12 and the tables at 5.19 - 5.21. For details of the treatment of any investment income you may have, see Chapter 6 and in particular paragraph 6.2. IR20 16 HMRC 03/09
This guidance does not apply from 6 April 2009. The guidance it contains is replaced by the guidance provided in HMRC6 – Residence, Domicile and the Remittance Basis. It is kept available for those people who need to make reference to IR20 for their tax affairs before 5 April 2009. 3.16 Some special provisions applying to those coming to the UK are dealt with as follows 4 Domicile • earnings of those who come to the UK part way through a tax year: paragraph 5.4 • lump sums from overseas pension schemes and provident funds: paragraph 5.16 • UK Government securities: interest arising in year of arrival in UK: paragraph 6.7 • investment income of those coming to the UK part way through a tax year: paragraphs 6.18 onwards • tax allowances: paragraph 7.4 • capital gains: paragraphs 8.3 - 8.6 4.1 Domicile is a general law concept. It is not possible to list all the factors that affect your domicile, but some of the main points are explained in this Chapter. 4.2 Broadly speaking, you are domiciled in the country where you have your permanent home. Domicile is distinct from nationality or residence. You can only have one domicile at any given time. Domicile of origin 4.3 You normally acquire a domicile of origin from your father when you are born. It need not be the country in which you are born. For example, if you are born in France while your father is working there, but his permanent home is in the UK, your domicile of origin is in the UK. Domicile of dependency 4.4 Until you have the legal capacity to change it - see paragraph 4.5 - your domicile will follow that of the person on whom you are legally dependent. If the domicile of that person changes, you automatically acquire the same domicile (a domicile of dependency), in place of your domicile of origin. Domicile of choice 4.5 You have the legal capacity to acquire a new domicile (a domicile of choice) when you reach age 16. To do so, you must broadly leave your current country of domicile and settle in another country. You need to provide strong evidence that you intend to live there permanently or indefinitely. Living in another country for a long time, although an important factor, is not enough in itself to prove you have acquired a new domicile. Married women 4.6 Before 1974, when you married you automatically acquired your husband’s domicile. After marriage this domicile would change at the same time as your husband’s domicile changed. If your marriage ended, you kept your husband’s domicile until such time as you legally acquired a new domicile. This rule is modified by the terms of the double taxation agreement between the UK and the USA. A marriage before 1974 between a woman who is a US national and a man IR20 17 HMRC 03/09
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