ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change is adverse to some taxpayers in principle. But it is expected to have no practical effect as it is in line with current practice.
Change 124: Individuals in the United Kingdom for temporary purpose: substitution of 183 days for six months: sections 831 and 832
This change replaces references to six months with references to 183 days in sections 831(1) and 832(1) which deal with the residence status of individuals who are in the United Kingdom for some temporary purpose only.
Section 831(1) is based on section 336(1) of ICTA which provides that:
“A person shall not be charged to income tax under a charge to which subsection (1A) applies as a person residing in the United Kingdom, in respect of profits or gains received in respect of possessions or securities out of the United Kingdom, if—(a)he is in the United Kingdom for some temporary purpose only and not with any view or intent of establishing his residence there, and(b)he has not actually resided in the United Kingdom at one time or several times for a period equal in the whole to six months in any year of assessment, but if any such person resides in the United Kingdom for such a period he shall be so chargeable for that year.”
Section 832(1) is based on section 336(2) of ICTA, which provides that:
“For the purposes of determining taxable earnings from an employment under Chapters 4 and 5 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 (employment income: charge to tax), a person who is in the United Kingdom for some temporary purpose only and not with the intention of establishing his residence there shall not be treated as resident in the United Kingdom if he has not in the aggregate spent at least six months in the United Kingdom in the year of assessment, but shall be treated as resident there if he has.”
Section 336(1) and (2) of ICTA both depend upon the question whether the period or periods during which the person has been actually residing in the United Kingdom, or which the person has spent there, amount in total to six months. But the number of days in a consecutive period of six months may vary between 181 and 184. In the majority of cases, the period is of 183 days or less.
Accordingly, to ensure fairness between all persons affected by these provisions and to cater for broken periods, references to six months in these provisions are in practice treated as references to 183 days. This practice is published in HMRC booklet IR20: Residents and non‑residents: Liability to tax in the UK.
Sections 831(1) and 832(1), therefore, refer to 183 days in place of six months.