SDLTM09895 | SDLT - increased rates for non-resident transactions: Non-resident in relation to a chargeable transaction:Crown employment - para 6 Sch 9A FA03

(All legislative references are to Sch 9A FA03)

In determining whether an individual is UK resident under the residence tests in paragraph 4 and 5, special rules apply if the individual is in Crown employment.

“Crown employment” means employment under the Crown (paragraph 6(4)):

• which is of a public nature; and

• where the earnings from the employment are payable out of the public revenue of the UK or Northern Ireland.

For example, Crown employees include civil servants, members of the armed forces and diplomats.

For the purposes of the residence tests, an individual is treated as present in the UK at the end of a day if, at that time, they are in Crown employment and are present in a country or territory outside the UK for the purposes of that employment (paragraph 6(1)).

This rule is also extended to the spouse or civil partner of a Crown employee, provided they are living together at the end of that day (paragraph 6(2)).

Section 1011 of the Income Tax Act 2007 applies for the purposes of determining whether spouses or civil partners are living together. Under this section, individuals who are married to, or are civil partners of, each other are treated as living together unless:

• they are separated under an order of a court of competent jurisdiction;

• they are separated by deed of separation; or

• they are in fact separated in circumstances in which the separation is likely to be permanent.

It is important to note that this rule only applies in relation to an individual if they make a claim to such effect in a land transaction return or an amendment of such a return (paragraph 6(3)). The relief can be claimed at Question 52 on form SDLT 1.

Example

Marcel is a member of the British Army. Between 1 January 2025 and 1 January 2028, Marcel is deployed in Cyprus. Marcel is accompanied by his wife, Rebekah. During this period, neither of them spend any time in the UK.

On 31 August 2026, Rebekah purchases a freehold residential property in England for £900,000. The residence test set out in paragraph 4 applies to determine whether Rebekah is treated as UK resident. Although Rebekah has not spent any time in the UK during the relevant time period, throughout that period she was living with Marcel who was in Crown employment and in Cyprus for the purposes of performing activities in the course of his employment for the British Army.

Paragraph 6(2) therefore applies, and Rebekah is treated as UK resident in relation to the transaction.