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8. Departing from the UK

If you emigrate from the UK you will stop being resident here. This would mean that you leave, set up home elsewhere, and substantially cut your ties to the UK.

If you leave for shorter periods, for occasional residence abroad, or with no settled purpose abroad, it is likely that you will remain resident in the UK – even if you become resident in another country under that country’s rules.

8.1. Leaving the UK permanently or indefinitely

If you are leaving the UK permanently or indefinitely, either to work or for another reason, you must tell us by contacting your tax office. We will give you form P85 to complete so that you can get any tax refund you are owed. We will also tell you if you will need to complete a UK tax return after you have left the country.

Leaving the UK ‘permanently’ means that you are leaving the country to live abroad and will not return here to live. Leaving ‘indefinitely’ means that you are leaving to live abroad for a long time (at least three years) but you think that you might eventually return to live here, although you do not currently have plans to do so.

The act of leaving the UK does not necessarily make you not resident and not ordinarily resident. You must also make a definite break from the UK and any remaining ties you have with the UK must be consistent with not being resident here. If you say that you are no longer resident and ordinarily resident in the UK, we might ask you to give some evidence to show that you have left the UK permanently or indefinitely and that there has been a clear change in the pattern of your life. For example, we would expect you to show that when you left the UK you had acquired accommodation abroad to live in as a permanent home. If you still have property in the UK which you can use after you leave, we might want you to explain how retaining that property is consistent with leaving the UK.

You will not cease to be resident in the UK simply because you become resident elsewhere. You can become resident in another country and remain resident in the UK.

If you are leaving the UK permanently or indefinitely you will become not resident and not ordinarily resident from the day after the day of your departure.

8.1.1. The year you leave

Although the normal rule in law is that you are taxed as a resident for the whole of the tax year in which you are UK resident, there is an Extra-Statutory Concession (ESC A11) that allows the tax year to be split. The effect of this concession is that you have to pay UK tax as a resident only for the part of the tax year before you finally leave.

ESC A11 has particular conditions; it does not apply in all cases. If you were ordinarily resident in the UK before your date of departure you have to stop being ordinarily resident here to benefit from the concession. Part 3 explains what we mean by ordinarily resident in the UK. ESC A11 will never apply if your date of departure and date of return fall in successive tax years. You will always need to be not resident for at least a whole tax year for it to apply.

An Extra-Statutory Concession will not be given in any case where an attempt is made to use it for tax avoidance.

8.2. Leaving the UK for shorter periods of time

You will still be treated as resident in the UK if any periods of time you spend outside the UK are for occasional residence abroad only. Occasional residence means you have no settled purpose for a continuing absence from the UK. ‘Occasional’ does not mean that your absence must be isolated or of short duration. A series of business trips abroad is an example of periods of occasional residence abroad.

If you normally live in the UK and go abroad regularly, for example on extended holidays, you will continue to be resident here. This type of absence does not stop you being resident and ordinarily resident in the UK, because you have not made a definite break from the UK.

8.2.1. Evidence of a definite break

If you do not make a definite break and cut your UK ties then you remain resident in the UK. You could also be dual resident – that is resident in the UK and another country.

You might not have evidence of a definite break from the UK for some time after you leave the UK. In this situation you will need to review your residence status later to confirm whether you have become not resident, and when this happened.

For example, if you have travelled in and out of the UK fairly frequently, the exact timing of the end of your residence here could be difficult to establish. You should therefore keep evidence relating to your lifestyle before and after the date on which you think you ceased to be resident.

If the circumstances of your life change gradually, then you will become not resident only when you have sufficiently reduced your ties to the UK and are more than occasionally resident abroad.

The evidence that you will be able to show that you have made a definite break will depend on the extent of your UK ties initially. If you had few initial connections with the UK you will have less evidence to show that you have made a definite break.

In those circumstances strong ties to another country, including a home and settled purpose for your presence there throughout a complete tax year, would be more of a factor in deciding if you have left the UK permanently or indefinitely.

8.3. Complete absence from the UK

Residence is connected to physical presence. If you live outside the UK for a complete tax year and do not set foot in the UK you will not be resident in the UK for that tax year, unless your absence from the UK is for the purpose of occasional residence abroad only. For example, if your absence was for a one-off year long holiday after which your residence in the UK resumed its previous pattern, you would remain UK resident during your absence.

If you became not resident simply because of a complete absence from the UK, it is unlikely that your presence in the UK on your return is for a temporary purpose only if any of your UK ties remained throughout your period of absence. You would most likely become resident again on your return.

Even when you are absent for a whole tax year and so become not resident, you might remain ordinarily resident in the UK. You will need to consider the pattern of your residence over a number of years and the purpose and pattern of any ordinary residence abroad.

8.4. Special rules for certain employees and offices

There are special rules for some employees who work abroad or hold certain offices. These are explained in brief below with links to further guidance where applicable. Some groups of employees are dealt with in specialist tax offices and where this is the case the office is shown in part 13 Contacting HMRC. Where no specialist office is shown individuals should contact their own tax office.

Crown employees

A Crown employee is someone who holds an office or employment under the Crown such as a member of the UK armed forces, a civil servant or a diplomat. It does not include all public servants such as doctors and nurses, who work for their local NHS Trust, or teachers who work for the Local Education Authority. Nor does it include employees of government agencies and non-departmental public bodies.

Crown employees are always taxed in the UK in full on their Crown employment income whether the duties of the employment are carried out in the UK or overseas. As a result residence is irrelevant in working out their tax liability on their Crown employment income.

UK merchant navy seafarers

Seafarers working on UK ships, who usually live in the UK when they are not at sea, are resident in the UK. But while they are working as seafarers wholly or partly outside the UK, they may be entitled to the ‘Seafarer’s Earnings Deduction’ which can reduce the tax they have to pay. You can find full details at www.hmrc.gov.uk/cnr/seafarerstax.htm

Certain oil and gas workers

Where an individual works in the oil or gas exploration/extraction industry within the UK’s territorial waters, or other designated areas, they are taxed in full in the UK on those earnings irrespective of their residence status. Different rules can apply for those working outside the designated areas or those working for non-UK employers. You can find more guidance at www.hmrc.gov.uk/manuals/eimanual/EIM40208.htm

Entertainers and sportspeople

Entertainers or sportspeople who are not resident in the UK but perform or compete in the UK are still taxable in the UK on any payments received in connection with that UK work. Normally the person paying the entertainer or sportsperson will withhold tax from the payments

Students

The UK has entered into Double Taxation Agreements with many countries that provide special rules for students who come to the UK to study, or go from the UK to study abroad. Under these rules certain income is not taxable in the country of study if it is used only for the maintenance and education of the student. You can find more general guidance for students at www.hmrc.gov.uk/students/

People seconded to work in the UK by their employer

If you are seconded to work in the UK by your employer, and continue to undertake duties abroad, you should keep records of work done in the UK and abroad, covering both the nature of the work and its extent. In recording working days, part days are included for these purposes, not just those days where you are in the UK at midnight.

Employees of the European Union

If an individual who is ordinarily resident in the UK goes abroad to take up employment in the European Union in a member country, they will remain ordinarily resident in the UK for the purpose of UK Income Tax, though not for Capital Gains Tax. If the individual remains ordinarily resident they will also remain resident for any year in which they visit the UK, no matter how short their stay.

So if Mr Adams was resident and ordinarily resident in the UK and went to Luxembourg to work for the European Union he would remain ordinarily resident in the UK throughout and resident for any tax year in which he visits the UK.

Members of the UK Parliament and House of Lords

Members of the House of Commons (‘MPs’) and House of Lords (‘Peers’) are resident, ordinarily resident and domiciled in the UK for Income Tax, Inheritance Tax and Capital Gains Tax. This will apply to the whole of each tax year in which a person is a member of either House, starting in 2010–11. This applies even if that person is a member for only part of the tax year and regardless of whether or not they are on a leave of absence. It does not apply to the Lords Spiritual or Peers who are disqualified from sitting and voting as a result of becoming a Member of the European Parliament or a judge.