Ordinarily resident vs. not

Hello,

Can anyone tell me how UK tax treatment differs for people who are ordinarily resident vs. resident but not ordinarily resident (in either case, domiciled in the US, not in the UK)?  I've been able to find quite a bit of information on the HRMC website on figuring out who belongs in which category, but none on why it matters. 

On a related note, can anyone recommend a good software provider for the non-residence supplemental pages for UK self-assessment, as the HRMC software doesn't seem to cover it?

Thanks much!

I was wondering that, I was going to apply for a U.S. military job in the UK. But they said it was not open to those who were ordinarily residents, but what is that?  Am I a ordinarily resident because I am here on FLR?

Someone else can probably answer your question a lot better, but I think the key difference is how long you have been, or expect to be, here -- if you are here for 3 or more years, then you are considered ordinarily resident.

So, maybe not, since my visa is only good for 2 years and we are considering going back to the U.S. and I have only been here for a month. 

Why it matters:

1)  You only get taxed on income earned in the UK.  If you had workdays outside the UK, AND did not deposit your paycheck in the UK, that income will be exempt.

2)  The cost of your housing may be exempt under "detached duty releif".

3)  Given the above, it may pay to see a UK tax accountant to help you determine the amount of rebate you may be entitled to.

In addition to the above, your income earned outside the UK (US bank accounts, US securities accounts, rent on your US house, etc) is tax exempt unless you bring it into the UK. This is also true if you are ordinarily resident, so it's not one of the differences.

I was just wondering in terms of applying for a civvy job with the U.S. Army based here in the UK.  They stated you can not be ordinarily resident. I suppose I can just apply and see what they say.

Thank you!

The concept of ordinary residence matters for capital gains tax purposes. You need to be not ordinarily resident to be exempt from that. Unless you're playing the stock market or have majotr investments any capital gains are likely to be from the sale of a house and that is exempt anyway if it's your principal private residence. Husband and wife can only have one of those between them. Get specialist advice if you intend to buy a second home in the UK.