The long-awaited replacement for IR20 has now been received. It is called HMRC 6. It is quite similar to IR20, except that it has all been rearranged, which makes it rather difficult to compare. The main elements are still there, although they are now hedged around with so many disclaimers that they begin to look like a Letter of Engagement. The idea that anybody should be able to rely on this revised guidance seems absolutely unthinkable – except that this is surely the only reason it has been published.  

Leaving the United Kingdom: Hotel California  

It is surprising that, having regard to the critical importance that HMRC place on the concept of a distinct break in all the recent cases on the subject, there is no reference to it anywhere in HMRC 6.  

They are very keen on emphasising that the act of leaving the United Kingdom does not mean you will automatically become non resident. After you leave the country, your residence position will be affected by a number of factors, which include:

The reason you left the United Kingdom;

  1. What visits you make to the United Kingdom after you have left; and
  2. What connections you keep in the United Kingdom such as family, property, business and social connections.  
  3. This sounds rather as if they are thinking about a distinct break here – but maybe just keeping their options open.  

One or two new passages are interesting. For example, in explaining the day count, they say that “it is the number of days counted in this way [i.e. midnights] that is important, not the number of visits you make to the UK”. That is a very helpful statement, but if it is not important, why is the number of visits you make to the United Kingdom a specific question on the tax return?

The whole thrust of their arguments in this most controversial area is that to become non resident you have to leave the United Kingdom. Now, it seems, on their new practice, you have to do more than leave the United Kingdom; you have to leave the United Kingdom and satisfy a number of other conditions as well. It sounds like “Hotel California” to me.

There is also an additional condition if somebody leaves the United Kingdom to work abroad as an employee. We are familiar with the idea that it is necessary to leave the United Kingdom to work abroad under contract of employment that lasts for at least a whole tax year and that you must be absent for a whole tax year, subject to the conventional day counts. However, there is a new condition, which is that “You have actually physically left the UK to begin your employment abroad and not for example to have a holiday until you begin your employment.” If you do not meet this condition, you will remain UK resident.

It seems likely that this will catch nearly everybody who goes to take up an employment abroad. Nobody leaves the United Kingdom and arrives in the new country where he or she will be working and immediately goes into the office. People normally have a few days to settle into their new accommodation and start work, perhaps, the following week. Disaster. However, perhaps HMRC will not regard this as having a holiday – but I do not see why not. How many days not working prior to taking up your employment will represent a holiday?  

Ordinary Residence

As far as ordinary residence is concerned, there is a whole new section that was not found in IR20. It has no basis in law, of course; it is only their practice – but it is a pity that it is plainly wrong in law, because it concentrates heavily on the intentions of the taxpayer, which are specifically not a relevant consideration.

HMRC suggest that three years is a reasonable period after which it is sensible to regard somebody as ordinarily resident in the United Kingdom. Although there is only doubtful authority for a three-year period, it is a reasonable test with which we have all become familiar and it should not cause any problems. It also found favour with the Special Commissioners in Genovese.

However, there is one sneaky change. In IR20, paragraph 3.9 said that you become ordinarily resident from the beginning of the tax year after the third anniversary of your arrival. However, in HMRC 6, they say that you become ordinarily resident at the beginning of the tax year in which the third anniversary falls. This harks back to a change they tried to introduce in the 1992 edition of IR20, but which was subsequently withdrawn. I guess it will stick this time.  


The domicile guidance is a very good summary, but it is simply not fit for its express purpose. It is supposed to be guidance so that the taxpayer can determine his or her domicile for the purpose of self-assessment. In many quite ordinary situations, the taxpayer would have to be seriously knowledgeable about the subject to reach the right conclusion from this guidance.  

There are a few odd passages. For example, they say at paragraph 48130 that “residence creates a presumption of domicile”. This must surely be misleading. Of course, you need to be resident to acquire a domicile of choice, but there is no legal presumption about it – and I would suggest there is no presumption at all. You only have to look at Ramsey v Liverpool Royal Infirmary, in which it says that “mere length of residence is by itself insufficient evidence from which to infer the animus”.  

HMRC make it clear that there are many things that go to make up the determination of where a person is domiciled and the sort of enquiries they envisage will, in some cases, be entirely reasonable. However, this does set the scene for an unlimited amount of personal questioning, and HMRC can claim that any question – no matter how irrelevant or intrusive – can be asked with full justification. This could be supported by Drevon v Drevon and the celebrated passage that starts “there is no act or circumstance in a man’s life however trivial it may be in itself, which ought to be left out of consideration”, which means that HMRC can go on asking intrusive questions until the cows come home. Just in case this sounds a little extreme, would you be able to prove that your client’s grandparents were validly married under English law, and that one of them was not already married to somebody else (which would make their marriage bigamous and therefore void), causing your client’s father to be born out of wedlock, with the consequent effect on his domicile?

It is hoped that HMRC 6 and the accompanying documents are still works in progress and that there is scope for further amendment.