CheckLists.Tax (beta)
R2. Individual ceasing to be UK resident
RESIDENCE TEST
INCOME TAX
Effect of non-residence in general
- Non-resident individuals receiving non-UK income (exclusions from charge)
Trading income - ITTOIA 2005, s.6
Property income - ITTOIA 2005, s.269
Savings and investment income - ITTOIA 2005, s.368
Miscellaneous income - ITTOIA 2005, s.577
Employment income - ITEPA 2003, s.15
Pension income - ITEPA 2003, s.575
- Non-resident individuals receiving UK source income (relief on some UK source income)
General rule
- Income tax liability of non-resident individuals is limited to tax deducted at source plus tax on income that is not disregarded income.
- Certain reliefs are disregarded (e.g. personal allowance).
Disregard income
- Property income and employment income are not disregarded income.
Exception for income in relation to which there is a UK representative (branch or agency)
- Certain income in relation to which the non-UK resident has a UK representative (branch or agency) is not disregarded income.
Legislation: ITA 2007, s.811, s.813(2), ss.835C - 835S.
HMRC manuals: INTM268020;
Commentary: Kessler, Chapter 50;
See further:
Split-year
- Split-year residents cannot rely on relief in relation to UK source income
- Relief in ITA 2007 s.811 does not apply to persons claiming split year treatment.
Legislation: ITA 2007, s.810(4)
Cases:
HMRC manuals:
Commentary: Kessler, Chapter 50;
See further:
- Income and gains benefitting from split year treatment
Income
- General earnings of employment (ITEPA s.15(1), (1A)) - see F1. Employee monetary income.
- Interest income (ITTOIA s.368(2)).
- Dividends (ITTOIA s.368(2)).
Legislation:
Cases:
HMRC manuals:
Commentary:
See also:
Transfer of assets abroad
- Transfer to UK-resident individual who becomes non-resident as a relevant transfer
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Legislation:
Cases:
HMRC manuals:
Commentary:
See also:
CAPITAL GAINS TAX
Section 86: attribution of gains to UK resident settlor
- Gains treated as arising in split year: treated as arising in the UK resident part of the split year
- Where the trust is settlor interested and the settlor has a split year, the gains treated as arising under s.86 (because the settlor was UK resident in part of the year + settlor interested), they are treated as arising in the UK part of the year (s.86(4)).
- Note the broad definition of settlor interested.
- See further i5. Disposals and operations on trust assets.
Legislation: TCGA s.86;
Cases:
HMRC manuals:
Commentary:
See also:
Section 87: matching benefits to gains
- Gains matched to benefits in a split year: gain accrues in UK resident part
- Where gains are treated as accruing to an individual in a split year, they are treated as accruing in the UK part of the tax year (s.87(2A)).
Legislation: TCGA s.87;
Cases:
HMRC manuals:
Commentary:
See also:
INHERITANCE TAX
Long-term non-residence
- When LTR status is lost
Transitional provision
- If:
(1) An individual (T) would otherwise be LTR in a tax year.
(2) T was not domiciled in the UK (under common law) on 30 October 2024.
(3) T was not resident in the UK in 2025/26 or any subsequent tax year ending with the relevant tax year.
(4) Either
Legislation: FA 2025, Schedule 13, para 46;
Cases:
HMRC manuals:
Commentary:
See also:
- Charge on property becoming not relevant property when settlor becomes long-term non-resident
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Confirm
Legislation:
Cases:
HMRC manuals: IHTM47023;
Commentary:
See also: