Special rules apply to prevent individuals avoiding UK tax by leaving the UK for a period of five years or less (ie, by becoming temporarily non-resident). Where the conditions are met, capital gains and certain types of income that arose during the period of temporary non-residency, must be brought into account for the tax year in which the person resumes UK residence. HMRC’s guidance explains the conditions that must be met for the rules to apply and sets out the types of income and gains that are relevant. 

HMRC is writing to taxpayers who: 

• indicated that they were non-UK resident in their income tax self assessment (ITSA) tax return for at least one tax year since 2018/19; 
• met the conditions to be classed as a temporary non-resident;
• received income or disposed of assets before or during their period of temporary non-residency; and
• did not declare any or all of their income or gains on their ITSA tax return for the first year they became UK resident again.  

The taxpayer is asked to check that their tax returns for 2018/19 onwards are correct and to take the following action within 60 days of the date of the letter: 

• where an error is found in an ITSA tax return for 2023/24 or 2024/25, amend the return;
• where an error is found in an ITSA tax return for an earlier year, disclose the error to HMRC by following HMRC’s guidance. The disclosure can be made by using HMRC’s digital disclosure service or the contractual disclosure facility (CDF). The CDF should be used if the taxpayer’s actions were deliberate and caused a loss of tax; or
• where the taxpayer believes that their ITSA tax returns are correct, contact HMRC using the details given in the letter.  

The letter explains that interest will be charged on tax paid late and that HMRC will consider charging a penalty for an inaccuracy in a return on a case-by-case basis. If the taxpayer does not take any action, HMRC may use the information it holds to assess the tax due.  

Further information 

• Has HMRC sent your client a letter? | ICAEW 
• Temporary non-residents and Capital Gains Tax (Self Assessment helpsheet HS278) - GOV.UK
• RFIG21500 - Statutory Residence Test (SRT): Temporary non-residence: Contents - HMRC internal manual - GOV.UK