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Introduction

Until 5 April 2013, ordinary residence was one of three key factors you needed to consider when deciding whether, or to what extent, an individual was liable to tax in the UK. The other factors being residence and domicile.

Residence is established on a year by year basis, and can be broken by absences abroad. See the Residence ― overview guidance note. Ordinary residence arose as the result of a settled purpose, and so could continue despite absences. Domicile is distinguished from ordinary residence because it is more permanent and difficult to dislodge, see the Domicile guidance note.

Although ordinary residence was abolished as a concept for tax purposes from 6 April 2013, you may need to consider the individual’s ordinary residence status in the 2013/14 to 2015/16 tax years as there are transitional provisions which might impact the tax position. These transitional provisions are discussed in this guidance note.

What is ordinary residence?

Ordinary residence has never been defined in statute, so it is necessary to consider the case law.