Residency (DTA) ‘One to Many’ Letter

24 Feb 2021

HMRC’s Wealthy External Forum have issued a briefing to forum members about One to Many educational letters being sent to taxpayers dealt with by HMRC Wealthy who have claimed relief under a Double Taxation Agreement in the tax year 2018/19.

HMRC Wealthy are writing directly to individuals with a separate letter to the agent where the taxpayer is represented.

CIOT feedback: The letter/briefing states that, to claim relief under a DTA, taxpayers will need to submit a certificate of residence from the home country’s tax authority. Our members’ experience is that a certificate of residence is not usually submitted alongside the tax return containing a DTA relief claim. Typically, such certificates would only be obtained and sent to HMRC if HMRC make a specific request. In fact, in some members’ experience, HMRC have accepted foreign tax returns filed on a resident basis as evidence of residence.


HMRC’s response:


Thank you for your feedback on the Residency DTA briefing.

In relation to this, we appreciate that returns are sometimes submitted without a certificate of residence and in those cases we will often have to request the documentation after the fact. The guidance is clear, however, that it is a requirement within the tax return filing guidance that, when making such a claim, a Certificate of Residence should be attached to the relevant claim form and sent in with the tax return.


The online guidance on the HMRC website states that ‘If you want to claim relief from UK tax on your UK income, and the country you live in has a double taxation agreement with the UK, you will need this certificate. To get one, contact your country’s tax authority. The certificate of overseas residence must show that it regards you as resident, under their domestic laws, for the period in question. You must attach the certificate to your claim form[RM2]  and send it in with your tax return.’

This is for Dual Residence form HS302. The page for Non-Residence HS304 states the same but it links the relevant form HS304.

There is other guidance for cases involving the US where certificates are not required – see https://www.gov.uk/government/publications/dual-residents-hs302-self-assessment-helpsheet/hs302-dual-residents-2020).


We have seen a lot of cases where customers were not attaching Certificates of Residence. As the claim is incomplete without a Certificate of Residence, we wanted to ensure we were addressing this point and that claims were being completed properly, hence our activity. We also wished to ensure the claim forms themselves (either HS302 or HS304 depending on the individuals’ circumstances) were completed, as often we saw income being excluded from UK charge under a DTA, but no actual claim form being attached with the return.


We understand that in some cases individuals may experience practical difficulties obtaining a certificate or residence and we may, on a case by case basis, accept other means of documentation as evidence of residence, e.g. foreign tax returns. This is usually agreed upon once an enquiry is launched into an individual case. In the first instance, however, we would expect customers to submit the required documentation, per the guidance, when making claims on their returns.