EIM42810 - Residence or employment in the United Kingdom

Part 2 Chapters 4 and 5 ITEPA 2003

Meaning of ‘resident’ in the United Kingdom

You need to know an employee’s residence status before you can decide what general earnings are chargeable to Income Tax.

The Statutory Residence Test (SRT) was introduced from 6 April 2013 (2013 to 2014 onwards). This test is now legislated (Finance Act 2013 schedule 45 section 22) and the guidance can be found at RDRM11000 onwards. It must not be used for years prior to 2013 to 2014.

With the introduction of the SRT the concept of ordinarily resident became obsolete.

For years prior to 2013 to 2014 the Taxes Acts did not define what was meant by resident and ordinarily resident. Essentially it was a question of fact decided by the relevant facts of the particular case.

You needed to know if the employee was:

• resident or not resident
• ordinarily resident or not ordinarily resident

‘Resident’ was related to actual presence in the United Kingdom during the tax year.

‘Ordinarily resident’ was normally where an individual was resident year after year.