RDRM10435 - 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.