The definition of what is meant by UK residence is of central importance for UK taxation purposes. Whether a person is UK-resident or not will determine, in many cases, their liability to income tax and capital gains tax and also to some extent their inheritance tax status. Residence will be even more important when the new proposals announced in the Pre-Budget Report are introduced.
It is surprising that there is no specific test laid down in the taxation legislation. The concept of residence in legal terms derives from a number of decisions of the courts, many of which were heard in the early 20th century. While there are indications in those cases on the factors that need to be taken into account in determining residence there is no specific concise test laid down. The courts have held that the question of residence is one of degree and there is no technical or special meaning attached for tax purposes.
