Tax resident of nowhere

We are looking for advice on whether it is possible to be a tax resident of nowhere

Didn't find your answer?

Hi,

We are looking to find someone who can provide some advice on the concept of not being a tax resident of anywhere and whether tax will still have to be paid to HMRC  

By way of background:

  • we are UK residents for the current tax year and work full time in the UK;
  • one/both of us are planning on leaving the UK for the UK 2024/25 tax year and being a temporary non UK resident for that year;
  • while outside of the UK, in 2024/25, we will not be based in one particular country as we will be travelling through numerous countries;
  • my wife is due to receive a pension payout during the year from a UK pension;
  • The pension payment is below the £100,000 threshold;
  • We will not receive any other income during the year and
  • We are satisfied that we will be deemed as non residents under the Statutory Residence Test.
  • We are under the impression that we will be able to claim back tax from HMRC when we return to the UK, providing we can prove that we are not UK residents and are not residents of anywhere.

Many thanks, 

 

Replies (39)

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By David Ex
04th Jan 2024 20:49

You need to take (and pay for) tailored professional advice. Like you really really do!

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Replying to David Ex:
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By CuriousTraveler
04th Jan 2024 20:52

Hi David,

Thanks for replying.
Do you have any recommendations? It is very specialist and most people are ‘happy to look into it’ for a fee, but they have no prior knowledge.

Thanks

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Replying to CuriousTraveler:
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By David Ex
04th Jan 2024 21:01

CuriousTraveler wrote:

Hi David,

Thanks for replying.
Do you have any recommendations? It is very specialist and most people are ‘happy to look into it’ for a fee, but they have no prior knowledge.

Thanks

You might find someone here:

https://find.icaew.com/

Other professional bodies are available.

Just make sure you quiz any prospective adviser to assess their suitability. Obviously UK tax is one thing; overseas is another.

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By Matrix
04th Jan 2024 21:03

I looked at this before and found this firm:

https://www.everfairtax.co.uk/

I don’t know if they are any good or if it works (yet).

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By FactChecker
04th Jan 2024 21:26

I suspect that the key will lie in whether 'absence of residence in the UK' is the same as 'non-residence in the UK' ... specifically whether UK tax law recognises the possibility of you having no tax residence elsewhere?

Obviously most attempts at this fail due to the individual doing something during the year that generates income and (however small or for however short a duration) that generally leads to a tax residency and liability (even if that is zero).

So your scenario is unusual - which is precisely why you need expert advice (that is not available over a public forum).

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By jonharris999
05th Jan 2024 04:54

This is coming up reasonably frequently now. My take is:

* Yes it appears possible in theory

* Anyone other than the foolish or foolhardy would want to be sure about how they would meet a challenge from any relevant authority, which means tailored advice in every relevant country. And who wants to risk being the first person to be taken to tribunal, whether in the UK or anywhere else, so that we can all see what a judge thinks about the notion of not being resident anywhere?

* You've got a banking issue as well as a tax one, because the banks may issue standard letters whenever they get wind of the fact that their customers have changed residency, and if they don't like the reply for whatever reason (which of course they won't share), they'll close accounts.

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By Tax Dragon
05th Jan 2024 08:35

"We are looking for advice on whether it is possible to be a tax resident of nowhere." It is.

"...and whether tax will still have to be paid to HMRC." It will.

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By Justin Bryant
05th Jan 2024 09:00

Here's one simple method if you've got the dosh. https://aboardtheworld.com/

Otherwise, it's a simple case of applying the relevant tax residency tests in the relevant jurisdictions and avoiding being tax resident there, so it's probably more about getting appropriate visas, passports etc. than anything else (but you are still subject to UK tax at source re various UK situs assets and income therefrom - as obviously no DTA relief will apply).

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By richard thomas
05th Jan 2024 09:30

You, or more precisely your wife, have rightly been told to get professional advice, which may be needed for more than tax, but if you have got so close to executing your plan you have probably taken such other advice (including relationship advice, if, in accordance with the second bullet, you are possibly separating for a year?).

But it may be possible for me to save you some money. I can tell you what the law is that governs this situation in slightly more detail than Tax Dragon without actually giving you any advice but allowing you, and more importantly your wife, to draw your own conclusions.

But before I can do that I need some answers.

1. Where did you get the impression described in the last bullet point? I can see three possibilities: (a) the legendary “man down the pub/golf club”, (b) HMRC publications (c) the pension provider or a pensions/financial adviser. If it was (b) can you be more precise about which bits you researched.

2. Can you explain why, in the last bullet point, you refer to returning to the UK (and so presumably becoming resident) and at the same time that you “are” (not “were”) not UK residents and “are” (not were) not residents of anywhere.

3. In what tax year is this return to the UK?

4. What is the significance to you of the payment being less than £100,000?

5. From what material did you derive satisfaction that you will be non-residents under the SRT, in, presumably, 2024-25?

Purely out of interest I would have asked why you are doing all this, and whether the pain would exceed the gain you expect, but it doesn’t actually seem relevant to the tax issues.

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Replying to richard thomas:
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By CuriousTraveler
05th Jan 2024 10:29

Hi Richard,

Thank you for your reply and your offer to provide information.

Please see my response below in caps.

1. Where did you get the impression described in the last bullet point? I can see three possibilities: (a) the legendary “man down the pub/golf club”, (b) HMRC publications (c) the pension provider or a pensions/financial adviser. If it was (b) can you be more precise about which bits you researched.

THE TAX BENEFIT IS INCIDENTAL AND NOT THE REASON FOR TRAVELLING. WE ONLY BECAME AWARE OF IT WHEN SOMEONE SAID HAVE YOU CONSIDERED YOUR RESIDENCY. OUR IMPRESSIONS HAVE BEEN FORGED THROUGH READING HMRC DOCUMENTS ON STATUTORY RESIDENCE TESTS AND TIES PLUS A BDO ARTICLE AND VARIOUS OTHER DISCUSSIONS.

OUR PLAN IS TO ESSENTIALLY SPEND 3 MONTHS IN EUROPE, 3 MONTHS IN SOUTH AMERICA AND 3 MONTHS IN ASIA. THE COUNTRIES WE WILL BE SPENDING THE MOST TIME IN ARE LIKELY GREECE AND ARGENTINA.

https://www.bdo.co.uk/getmedia/9a110ced-e759-47f8-ad63-21e68d91956e/Tax-...

https://www.gov.uk/government/publications/rdr3-statutory-residence-test...

2. Can you explain why, in the last bullet point, you refer to returning to the UK (and so presumably becoming resident) and at the same time that you “are” (not “were”) not UK residents and “are” (not were) not residents of anywhere.

THIS IS A TYPO, APOLOGIES. WE WILL BE RETURNING TO THE UK AND BECOMING FULL RESIDENTS.

IT SHOULD HAVE STATED: WE ARE UNDER THE IMPRESSION THAT WE WILL BE ABLE TO CLAIM BACK TAX FROM HMRC WHEN WE RETURN TO THE UK, PROVIDING WE CAN PROVE THAT WE WERE NOT UK RESIDENTS OR INDEED RESIDENTS OF ANYWHERE, FOR THE PREVIOUS TAX YEAR.

3. In what tax year is this return to the UK

WE WILL TRAVEL FROM 1ST APRIL 2024 TO MID APRIL 2025 TOGETHER AND THEN RETURN TO THE UK AND BECOME RESIDENTS.

4. What is the significance to you of the payment being less than £100,000?

FROM HMRC:

For individuals returning to the UK after 5 April 2015, relevant withdrawals made under a registered pension scheme or RNUKS will be treated as if they accrued in the period of return if certain conditions are met.For relevant withdrawals made under a registered pension scheme to be treated as such, the total of the individual’s relevant withdrawals under a registered pension scheme and certain relevant withdrawals under an RNUKS (the first 6 types in the list below) made in the temporary period of non-residence must be more than £100,000.

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim754....

5. From what material did you derive satisfaction that you will be non-residents under the SRT, in, presumably, 2024-25?

THIS IS BASED ON THE HMRC STATUTORY RESIDENCE TEST. WE WILL HAVE NO UK EMPLOYMENT, WE HAVE NO UK HOME AND WE WILL NOT BE IN THE UK MORE THAN 90 DAYS.

Purely out of interest I would have asked why you are doing all this, and whether the pain would exceed the gain you expect, but it doesn’t actually seem relevant to the tax issues.

THAT IS A FAIR QUESTION. AS I SAID, IT’S MORE INCIDENTAL THAN THROUGH DESIGN. WE HAPPEN TO BE GETTING A PENSION PAYOUT AND WANT TO USE IT TO TRAVEL THROUGH DIFFERENT COUNTRIES - NONE OF WHICH WE WILL BE STAYING FOR MORE THAN A MONTH SAY.

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Replying to CuriousTraveler:
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By richard thomas
05th Jan 2024 15:21

Thank you for the very helpful replies. They go to prove the old adage “a little learning is a dangerous thing”. I can tell you now that you would not benefit from professional advice. This is why.

The UK, like many other nations, has income taxes based on two principles:

It taxes residents (as it defines the term) on their worldwide income

It taxes non-residents (ditto) on their UK income, more specifically where the income has a “source” in the UK.

These two principles are subject to qualifications, especially where the taxation of non-residents is concerned. The major qualification concerns double taxation agreements (DTA) of which the UK has very many, but the coverage is not universal. A DTA may limit or extinguish the amount of tax that the country of source may charge on a resident of the other state.

As I made clear in describing the two principles, the limited basis of taxation is determined by residence as that term is defined for UK tax purposes. You asked whether anyone can provide advice on the concept of “not being a tax resident of anywhere”. You certainly can be a person who in a given period is not and never becomes resident anywhere for tax purposes. But to determine whether any given person is so non-resident it is necessary to examine all the possible links between the person and the countries in which they spend any amount of time or have any links, including how much time they are present there; the question whether they have accommodation available for their use in a country; their nationality; the situation of their assets and the detailed rules of each country as they might apply to the person. All that can confidently be said is that if they spend a period of time (remembering that different countries determine residence by reference to different periods) in outer space or on the high seas they are likely to be resident nowhere for that period.

Unsurprisingly the question you ask is not one that UK tax legislation ever asks (so far as I can tell). Nor does it normally ask if a person is resident in any other specific country – the exceptions are mostly if not entirely to do with double taxation relief, and especially the rules for dual residents. Such people are those who are resident in the UK under UK law and resident in (for example) Ruritania by reference to Ruritanian law.**

Thus if you were to examine the statutory residence test on its home territory, the statute, Schedule 45 Finance Act 2013, you would find throughout that it is aimed at, in words of paragraph 1(1) “determining for the purposes of relevant tax whether individuals are resident or not resident in the UK.”

Those are the only questions the UK is interested in. Your question is essentially pointless.

Turning to the specific issue of pension payments from UK registered pension schemes, these follow the two main principles. As the source of the pension payments is the trust deed and other documents which constitute the scheme and the trustees and administrators are UK resident (I assume) the payments will have a UK source and a non-resident recipient is taxable on the full amount of the payment (Chapter 5A Part 9 Income Tax (Earnings and Pensions) Act 2003 (ITEPA).

The pension payer is under a legal obligation to deduct tax under PAYE, unless they have, before payment, received a notice of coding from HMRC which is an NT (no tax) coding.

I now turn to the non-statutory material you link to. HMRC’s Employment Income Manual, page 75450 as whole (and the BDO article) is entirely irrelevant to your wife’s situation as you have now presented it. What you have done is to extract one paragraph which on the face of it applies and mentions the £100k threshold you say she will meet, and wrenched it entirely out of its context.

Look at the heading of the page: “The taxation of pension income: temporary non-residence provisions”

Yes, you are satisfied that the SRT shows she will be not resident for one whole tax year, so if that is in fact the case she will in everyday language be temporarily non-resident. But look at the second sub-heading “Meaning of temporary non-residence”. Under the sub-sub-heading relating to departures (from the UK) after 5 April 2016 you will find links to the RDR Manual for the definition. Page 12610 is short and clear: the period of non-residence has to be five years. If it is not that long then EIM 75450 is not relevant, because you admit your wife will not be a temporary non-resident by reference to the statute (s 576CA(6) ITEPA)

But suppose she stayed non-resident, circling the globe or joining Elon Musk in outer space, for five years (we may have to ignore Einstein’s theory in the latter case) and returned to become UK resident. In that case EIM 75450 would be capable of applying to her. But it does not apply, because of the £100k threshold, which you say you will not breach. But that is not the only reason it does not apply.

The rule for temporary non-residents is an anti-avoidance rule and imposes liability on the pension payment in the year of return. But it only does that IF the payment was not taxable in the year it was paid. As shown above the only case in which it would not be taxable is if a claim could have been made to exempt the payment in the year of payment and that is only possible if the recipient is a resident of a state with which the UK has a double taxation agreement AND the treaty exempts the payment from UK tax. The only temporary non-residents who cannot take advantage of that are those who are resident in a country with which the UK has no treaty (eg Monaco), those who are resident in a treaty country but the treaty does not prevent the UK from taxing the pension, or THOSE WHO ARE NOT RESIDENT ANYWHERE.

There is no point in applying an anti-avoidance rule if tax has not been avoided, which it hasn’t here.

Descending further from the particular to the even more particular, it is possible that the tax deducted from the pension payment will be more than the rate of tax appliable to that single payment as representing the entire pension income of the year, and this is because of the operation of PAYE in these circumstances. Others who contribute to this forum are much better versed in PAYE matters such as this, but as I understand it any overdeduction on payment will be reversed in part or whole in the following months (if there are any) in the tax year.

Any overpayment remaining at year end ought to be brought out in the annual reconciliation and show as a repayment due on form P800. This will be issued in 2025-26 when you are back, and to this extent you are right when you refer in your question to the possibility of claiming back some tax. But for the wrong reasons.

Bon voyage.

**For a deliciously obscure piece of law which exemplifies this may I offer for impaction section 116 Finance Act 1989, my first attempt at instructing Parliamentary Counsel to draft tax law (see in particular subsection (4)):

116 Interest payments to Netherlands Antilles subsidiaries.
(1) A payment to which this section applies shall be treated for the purposes of—

(a) section 338 of the Taxes Act 1988 (payment of interest within section 124of that Act to be a charge on income), and

(b) section 349 of that Act (such a payment to be made gross),
as if it were a payment of interest within section 124 of that Act (quoted Eurobonds).

(2) This section applies to a payment of interest if—

(a) it is made on or after 1st April 1989 by a relevant United Kingdom company to a relevant Netherlands Antilles subsidiary, and

(b) not later than 90 days after the payment is received by the subsidiary, it is applied by the subsidiary in paying interest on quoted Eurobonds issued by it before 26th July 1984 or in meeting expenses incurred in connection with the issue of quoted Eurobonds so issued.

(3) In subsection (2) above—

(a) “relevant Netherlands Antilles subsidiary” means a company which—

(i) at the time when the quoted Eurobonds were issued was resident in the Netherlands Antilles (including Aruba) and was a 90 per cent. subsidiary of a company resident in the United Kingdom, and

(ii) at the time when the payment is made is resident in the Netherlands Antilles (but not Aruba) and is a 90 per cent. subsidiary of the relevant United Kingdom company; and

(b) “relevant United Kingdom company” means a company which is resident in the United Kingdom and which is not a 51 per cent. subsidiary of a company not resident in the United Kingdom.

(4) For the purpose of determining whether a company is a relevant Netherlands Antilles subsidiary, its residence (whether before 1st April 1989 or at any later time) shall be ascertained in accordance with the terms of the arrangements made with the Government of the Kingdom of the Netherlands on behalf of the Government of the Netherlands Antilles which had effect by virtue of section 788 of the Taxes Act 1988 immediately before 1st April 1989.

(5) In this section “quoted Eurobond” has the same meaning as in section 124 of the Taxes Act 1988.

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Replying to richard thomas:
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By FactChecker
05th Jan 2024 15:43

Quite possibly the best post I've seen on this forum ... managing (just) to stop short of advice whilst providing a full exposition as to the impact of OP's proposed sortie.

I guess OP deserved it more than most (since he did take the trouble to provide the requested missing explanations), although doubt he'll be pleased with the options now available.

But most illuminating (and nice to see legislation backing up logic).

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Replying to FactChecker:
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By jonharris999
05th Jan 2024 16:41

I agree with @Factchecker, except that I wholly differed from RT's references to "outer space". I am sure that the Moon does it too.

Thank you so much Richard.

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Replying to jonharris999:
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By richard thomas
08th Feb 2024 20:50

Since the UK has no DTA with the Moon; UK law includes the moon in outer space (s 13 Outer Space Act 1986); and terrestrial territories' airspace generally does not intrude above the lower limits of outer space (62 miles) I think my suggestion was a fairly safe one.

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Replying to richard thomas:
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By jonharris999
11th Feb 2024 21:41

I stand corrected yet again. I will be sure to confine myself to earthly matters in future.

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Replying to richard thomas:
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By Tax Dragon
05th Jan 2024 15:51

That's TD's answer, fleshed out.

I would in turn expand on (or at least underline) your caveat about OP's wife being not resident in the UK for the whole tax year, under the SRT. That caveat - that this conclusion is the OP's not yours - is necessary because we have not been provided with the information we would need to conclude on that question for ourselves. (Not that that really matters, as the UK tax seems to be the same either way... as TD summarised with "it will" earlier.)

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Replying to richard thomas:
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By richard thomas
05th Jan 2024 16:26

Many apologies, but re-reading what I said I realise that I have misrepresented the temporary non-residence test.

For the four paragraphs following the paragraph beginning “The pension payer” substitute:

“I now turn to the non-statutory material you link to. HMRC’s Employment Income Manual, page 75450 as whole (and the BDO article) is irrelevant to your wife’s situation as you have presented it. What you have done is to extract one paragraph which on the face of it applies and mentions the £100k threshold you say she will meet, and somewhat wrenched it out of its context.

Yes, you are satisfied that the SRT shows she will be not resident for just one whole tax year, so if that is in fact the case she will be temporarily non-resident within the meaning of the SRT. But the temporary non-residence provision (s 579CA ITEPA) is irrelevant: not only is the withdrawal less than £100k, but importantly she does not meet the requirement in s 579CA(3) that the withdrawal is tax free in the year of payment.

What you seem to have drawn from the passage of EIM 75450 that you quote in your reply is that because the payment is under £100,000 that somehow ensures that there is no taxability of the payment in the UK on grounds of non-residence everywhere, so that you can reclaim the tax.

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Replying to richard thomas:
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By CuriousTraveler
06th Jan 2024 20:19

Thank you very much, Richard. Your commentary is extremely helpful.

As you said, a “little learning is a dangerous thing”!

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Replying to richard thomas:
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By CuriousTraveler
10th Jan 2024 19:19

Hi Richard/ all,

Thank you for your guidance.

One last question, if I may. Hypothetically, if someone permanently emigrates to a country with no DTA e.g. Monoco in year 1 and receives a UK sourced private pension payment in year 7, are you saying that they will still be taxed in year 7 on that income in the UK and in effect will be restricted from reclaiming the income tax deducted at source?

If so, would you be able to refer to the relevant statute, please?

Many thanks.

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Replying to CuriousTraveler:
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By richard thomas
10th Jan 2024 19:51

Yes I am saying that, but whether they can reclaim any tax depends on how much tax is deducted under PAYE, how much tax is charged on the pension and whether, if not reflected in the coding, they can claim a personal or other allowances or reliefs.

The statute that applies is Chapter 5A Part 9 ITEPA 2003, particularly s 579A(1), 579B and 579C. The Chapter imposes no territorial or other limitation on the charge to tax.

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Replying to richard thomas:
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By CuriousTraveler
12th Jan 2024 15:12

Thank you, Richard.

If I understand you correctly, I think that you are saying that anyone in receipt of a UK sourced private sector pension is going to be subject to UK tax (subject to a personal allowance etc) irrespective of where they are resident (or, indeed, of how long they have been resident outside the UK), but, if they are resident in a country which has a DTA with the UK, then depending on the terms of the DTA they may be able to recover UK income tax deducted at source on the pension.

If that is the case, what is the point of section 579CA ITEPA 2003, if the default setting is that the UK source private sector pension is always taxable? Is it just to catch temporary non-residents who have had the benefit of a lower tax regime for their temporary period of non-residence? Presumably any tax paid on the UK pension in the foreign country at the time of receipt can be used to offset the UK tax payable on the temporary non-resident’s return to the UK in a subsequent tax year?

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Replying to CuriousTraveler:
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By Tax Dragon
12th Jan 2024 15:31

S579CA(3)(b)?

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Replying to CuriousTraveler:
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By richard thomas
12th Jan 2024 17:37

What I am saying is that (absent a relevant DTA) a non-resident is chargeable to tax on a pension payment of any sort from a registered pension scheme, subject to any exemptions found or referred to in Chapter 5A part 9 ITEPA.

Where there is a relevant withdrawal by a non-resident then s 579CA(3) determines whether that withdrawal is within the scope of the temporary non-residence (TNR) provisions in that section. The section says that the TNR provisions do not apply in two cases: where the payment is exempt under a DTA (whether or not a claim has been made for such treatment, as required by s 6 TIOPA) and where it is exempt otherwise than by reference to a treaty.

It is possible that the “otherwise” provision refers to Chapter 18 Part 9 ITEPA (Exemptions: non-UK resident taxpayers), although this is not cross-referred to in Chapter 5A. I would find it hard to accept that any other exemption which applied to residents and non-residents alike (see s 579A(2), (3) and 579CZA) could possibly lead a recipient who was temporarily non-resident to a charge to tax on their return.

It may be that the “otherwise” provision does not actually apply under current law, but is a form of future proofing or is just the result of a misunderstanding. It is odd as all the other comparable TNR provisions introduced in Part 4 Schedule 45 FA 2013 have a DTA test only or no test because non-residents are in fact exempt in all cases (eg chargeable gains and chargeable event gains).

You mention again recovery of UK tax. But I don’t understand why you think only a non-resident who is in a treaty country can make a claim for repayment of tax deducted if the tax deducted exceeds their liability, which may be because of a DTA or allowances or because any code number led to over-deduction.

As to your last sentence I would think that you ought to be able to credit foreign tax against the charge in the year of return – you would need to study the HMRC International Manual and Part 1 TIOPA if the point arose.

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Replying to richard thomas:
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By Justin Bryant
05th Jan 2024 16:40

As has been mentioned here before, although the TNR period is 5 calendar years plus one day, that is not enough UK absence to escape the TNR rules.
https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittan...

The fact this is five years and not five tax years means (ignoring split year treatment) you must remain non-UK resident for at least 6 continuous tax years following your departure from the UK to escape the TNR rules. So RDRM12610 is wrong.

https://www.accountingweb.co.uk/any-answers/day-or-rather-midnight-calai...

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Replying to Justin Bryant:
By Ruddles
05th Jan 2024 19:24

Justin Bryant wrote:

As has been mentioned here before, although the TNR period is 5 calendar years plus one day, that is not enough UK absence to escape the TNR rules.
https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittan...

The fact this is five years and not five tax years means (ignoring split year treatment) you must remain non-UK resident for at least 6 continuous tax years following your departure from the UK to escape the TNR rules. So RDRM12610 is wrong.

https://www.accountingweb.co.uk/any-answers/day-or-rather-midnight-calai...


As has been mentioned here before your analysis is not correct. For example, 5 April 2023 to 6 April 2028 is not 6 complete tax years.
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Replying to Ruddles:
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By Justin Bryant
12th Jan 2024 15:33

But that's the exception that proves the (normal) rule, innit? (So HMRC's manual is at best very misleading.)

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Replying to Justin Bryant:
By Ruddles
12th Jan 2024 15:50

It is only one of many "exceptions" that disproves your rule. Legislation says more than 5 years, HMRC say more than 5 years, I say more than 5 years, Richard T says more than 5 years, Croner-i say more than 5 years, Tolleys say more than 5 years. So where do you get 6 years from?

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Replying to Ruddles:
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By richard thomas
12th Jan 2024 16:30

The only way you can make it 6 years is to ignore split years, but you can't ignore split years because of para 113(1)(b) Sch 45 FA 2013. The legislation deals in "residence periods", not tax years. So you only need 4 complete tax years.

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Replying to richard thomas:
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By Justin Bryant
21st Feb 2024 14:57

.

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Replying to Justin Bryant:
By Ruddles
21st Feb 2024 15:12

If you leave on 6 April 2019 and return on 6 April 2024 you will not have met the 5-year test and so that 'extra' year is irrelevant.

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Replying to Ruddles:
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By Justin Bryant
21st Feb 2024 15:32

Yes; your're right (a senior moment!) and I was I think right the first time above and was overthinking it! (i.e. if you leave on say 26 April you can still be solely UK tax resident until the following 5th April etc. and that's where the potential extra c1 year required arises - I told you it was confusing).

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Replying to richard thomas:
By Ruddles
21st Feb 2024 16:09

richard thomas wrote:
The only way you can make it 6 years is to ignore split years, but you can't ignore split years

Depends on circumstances, does it not? Split-year treatment will not always apply. Even so, I can only get to a maximum of 5 tax years' absence required.

EDIT - no, I've found a scenario where 6 complete tax years would be required. So, Justin, I partially retract what I said earlier - sometimes 6 tax years would be needed. However, I would argue that the required circumstances would be somewhat uncommon so I would say that this would be the exception that proves the (5-year) rule.

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Replying to Ruddles:
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By Tax Dragon
21st Feb 2024 16:27

All it needs is that the residence period before the time abroad ends on 5 April and the period of residence on return starts on 6 April.

Couple that with the day after/day before rule (RDRM12640) and Justin's your uncle.

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Replying to Tax Dragon:
By Ruddles
21st Feb 2024 16:51

Tax Dragon wrote:

All it needs is that the residence period before the time abroad ends on 5 April and the period of residence on return starts on 6 April.

Which will arise only if actual departure is on 5 April and actual return is on 6 April - I would posit a relatively uncommon situation; or

Split-year treatment does not apply in either year of departure or return. (And whether it is 4, 5 or 6 tax years will depend on sole UK residence status in those years.)

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Replying to Ruddles:
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By Justin Bryant
21st Feb 2024 16:44

You actually need a wet towel around your head and RT is I think right that the TNR period can be as little as 4 years (if treaty residence applies in the year of departure & arrival).

I have not seen this explained properly (with good examples) anywhere (HMRC's manual gives the usual pretty useless noddy examples it seems).

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Replying to Justin Bryant:
By Ruddles
21st Feb 2024 16:52

Agreed - a cold wet towel in a darkened room.

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By Postingcomments
05th Jan 2024 10:30

What income are you looking to avoid tax on? That will be very relevant.

- Income arising in a country may be taxed there at source, even if you aren't resident there

- Temporary non-residents rules can apply and nab you on your return to the UK - ie tax income received while away.

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Tom Herbert
By Tom Herbert
05th Jan 2024 20:37

Sadly I'm not sure the crypto cruise ship built for 'citizens of nowhere' is accepting applications anymore...
https://www.theguardian.com/news/2021/sep/07/disastrous-voyage-satoshi-c...

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Replying to TomHerbert:
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By FactChecker
05th Jan 2024 21:00

A wonderful story that cheered me up no end - providing insights and copious proof (alongside asinine quotes) showing that the young uber-rich share two common attributes ... infinite self-belief and inexhaustible gullibility.
They also appear to lack the capacity to recognise when things have gone wrong - but I guess that's a result of those two core attributes!

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