UK and International Tax news
Temporary Non Residence and HMRC Nudge Letters
Tuesday 9th September 2025
HMRC have started contacting taxpayers who have recently returned to the UK after a short period of non residence and who may have failed to declare all of their income and gains in their tax return.
Where an individual leaves the UK for a period of up to five years, special tax rules may apply to tax capital gains and certain types of income that arose during the period of temporary non-residency, whether remitted to the UK or not, for the tax year in which the person resumes UK residence. For these rules not to apply, the period of non-residence must exceed five years, i.e. a minimum period of five years plus one day.
HMRC is focussing on taxpayers who indicated that they were non-UK resident in their income tax self assessment tax returns for at least one tax year since 2018/19 and have since returned to the UK.
If they have met the conditions to be classed as a temporary non-resident, have received income or disposed of assets before or during their period of temporary non-residency, and have not declared any or all of their income or gains in their tax return for the first year they became UK resident again, they are being asked to check that their tax returns for 2018/19 onwards are correct and to take action within sixty days of the date of the letter, in particular, where an error is found in a tax return for 2023/24 or 2024/25, to amend the return.
Where an error is found in a tax return for an earlier year, they should disclose the error by using HMRC’s digital disclosure service, or the contractual disclosure facility if the taxpayer’s actions were deliberate and caused a loss of tax.
HMRC advise that interest will be charged on tax paid late and penalties will be considered on a case-by-case basis.
If you would like more information on the above, please contact Keith Rushen on 0207 486 2378.
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