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Bringing it home

Understanding the definition of residency is key to making sense of recent legislation changes in this area

My partner is from overseas and wants to move here. I keep reading about changes to the UK residency rules. Can you tell me what his position is?

If your boyfriend’s application to the UK Border Agency is as a fiancé or proposed civil partner and is successful, he will be granted permission to enter the country and live here for six months while you get married or register your civil partnership. He can then apply to switch into the category of husband or civil partner.

When you are married and your husband applies again for residency and is successful, the UK Border Agency will grant him permission to remain another two years as he will already be in the UK when the application is made. Shortly before the end of this period, he may be able to apply for permission to settle as a permanent resident in the UK as your partner.

Issues surrounding UK residency have been in the press recently. As you know from last week’s Budget, HM Revenue & Customs is keen to encourage taxpayers – particularly those with offshore accounts – to ensure they are not under-declaring their UK tax liabilities.

A person who is living in the country but is not ordinarily a resident is liable to tax on his UK earnings and his foreign earnings are taxable only on the remittance basis. If, however, he is ordinarily resident he is liable to tax on the whole of the earnings from the employment, irrespective of how little of those earnings are earned in the UK.

HMRC is keen to ensure those with offshore accounts are not underdeclaring their UK tax liabilities

There is no statutory definition of ordinary residence in terms of broad guidance but the courts have held it is a regular habitual mode of life in a particular place, both adopted voluntarily and for one or more settled purposes.

Individuals will always be resident in the UK if they are here for 183 days or more in any single tax year.

Living in the UK year after year implies ordinary residence. It is possible to be resident abroad but ordinarily resident in the UK in the same tax year. In such circumstances, it is important to see if relief from a double taxation treaty is available.

Visitors to the UK are also treated as resident if present for an average of 91 days or more over a four-year period. Regular visitors who exceed the 91 days are also treated as ordinarily resident here.

Longer-term visitors who come to the UK for a specific purpose, such as for employment, are treated as resident from the day of arrival if they intend to remain in the country for at least two years. The individual will also be treated as ordinarily resident from the day of arrival if the intention is to stay for at least three years.

The determination of UK residence is an important factor as it is a trigger for liability to UK taxation, the extent of which will also depend on the individual’s domicile.

Broadly speaking, under UK law, you are domiciled in the country in which you have made your permanent home. Your future husband may want to change his domicile. For this to happen, he will need to show he is resident here and intends to reside permanently or for an unlimited time.

It is not a requirement that the taxpayer is resident in the UK for the purposes of income tax. Establishing a taxpayer’s domicile may require a detailed assessment of their personal circumstances.

Kim North (kim@ techandtech.co.uk) is director of Technology & Technical

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