Coming to Work in the UK: Ordinarily Resident or Not?

HM Revenue & Customs (HMRC) is taking an ever increasingly aggressive approach to taxpayers who claim a "non-domiciled" or "temporarily resident" tax status in the UK. Whether or not a taxpayer is "ordinarily resident" in the UK, is also relevant to determine the extent to which that taxpayer will be liable to UK tax. It remains a hot topic for those who claim the status.

A recent attack has been looking at "ordinary residence" status, of which the case of Tuczka v HMRC 2010 UKFTT 53 will come as very bad news to taxpayers. There is no statutory definition of "residence" or "ordinary residence" in the UK. The meanings have been derived and blurred through case law. Taxpayers had previously relied on guidance provided by HMRC in booklet IR20 to understand how they are likely to be treated by HMRC. IR20 was replaced with HMRC6 from 6 April 2009.

Under UK legislation, an individual will be taxable as if they were resident in the UK, if they spend 183 days or more in the UK in a given tax year. Ordinary residence is a more difficult concept, being more than residence. Its meaning has been derived from case law, and is "more than temporary [residence].... it connotes residence in a place with some degree of continuity."1 It is on the basis of these concepts that the UK courts and HMRC look at residence and ordinary residence in the UK for...