EIM42850 | Residence or employment in the United Kingdom:

Extra-Statutory Concession A11

Year of commencement or cessation of residence in the United Kingdom

Under the Statutory Residence Test (SRT) the individual is either UK resident or non-UK resident for a full tax year. However, if during a year the individual starts to live or work abroad or comes from abroad to live or work in the UK, the tax year can be split into 2 parts if their circumstances meet specific criteria.

The UK resident individual must consider whether split-year treatment applies to them. If they meet all the conditions of one of the split-year cases that case will be applied to them, they do not have a choice of whether split-year treatment applies.

This is different to those years prior to the introduction of the SRT (pre-2013 to 2014) when there was an element of choice via Extra-Statutory Concession A11.

For full details and information on the cases and conditions of split year see RDRM12000 onwards.

For years prior to the introduction of the SRT the Taxes Acts did not provide for splitting a tax year for residence purposes. Strictly an individual resident in the United Kingdom for a tax year was chargeable on the basis of being resident for the whole year. By concession, when an employee’s liability was affected by residence status, they were chargeable only by reference to the period of residence in the United Kingdom in the year if the employee:

• was “resident” here for part of a tax year and

• was “not ordinarily resident” here for the other part of the year

The effect of the concession was normally taken into account by stating the individual’s residence status as though the year was split.

The full text of Extra-Statutory Concession A11 is replicated below:

“A11. Residence in the United Kingdom: year of commencement or cessation of residence

The Income and Corporation Taxes Acts make no provision for splitting tax years in relation to residence and an individual who is resident in the United Kingdom for any year of assessment is chargeable on the basis that he is resident for the whole year.

But where an individual:

• comes to the United Kingdom to take up permanent residence or to stay for at least two years, or

• ceases to reside in the United Kingdom if he has left for permanent residence abroad,

liability to United Kingdom tax which is affected by residence is computed by reference to the period of his residence here during the year. It is a condition that the individual should satisfy the Board of Inland Revenue that prior to his arrival he was, or on his departure is, not ordinarily resident in the United Kingdom. The concession would not apply, for example, where an individual who had been ordinarily resident in the United Kingdom left for intended permanent residence abroad but returned to reside here before the end of the tax year following the tax year of departure.

This concession is extended to the years of departure and return where, subject to certain conditions, an individual goes abroad for full time service under a contract of employment. These conditions are:

• the individual’s absence from the United Kingdom and the employment itself both extend over a period covering a complete tax year, and

• any interim visits to the United Kingdom during the period do not amount to

  • 183 days or more in any tax year, or

  • an average of 91 days or more in a tax year (the average is taken over the period of absence up to a maximum of four years), and

• for years up to and including 1992-93, all the duties of the employment are performed abroad or any duties the individual performs in the United Kingdom are incidental to duties abroad.

Where the concession applies and the tax year is split, Section 128 Finance Act 1995 (limit on income chargeable on non-residents: income tax) does not apply for the period for which an individual is treated as not resident. That Section only applies to complete years of non-residence.”